Annual account deficit widens

New Zealand’s current account deficit for the year ended June 2018 widened to $9.5 billion, 3.3 per cent of GDP, Stats NZ said today.

The deficit is $2.4 billion wider than the year ended June 2017 deficit and is the largest since the year ended June 2009. 

Although the dollar value of the current account deficit has now risen to a similar level as during the global financial crisis, the economy has grown even more, said Stats NZ. 

“As a result, our net spend with the rest of the world has shrunk relative to the size of New Zealand’s economy. The latest deficit is equal to 3.3 per cent of GDP, larger than for the year ended June 2017 (2.6 per cent).”

Net liability position narrows as a percentage of GDP

At 30 June 2018, New Zealand’s net liability position was $157.9 billion. Compared with 30 June 2009 ($156.6 billion liability) it is slightly wider. 

The net liability position is how much New Zealand owes to the rest of the world.

As a percentage of GDP, the current liability position is 54.6 per cent; in June 2009 it was 82.6 per cent, the second-highest since the series began. 

The highest was at 31 March 2009 (84.2 per cent of GDP).

“If the rest of the world called in all the debt New Zealand owes overseas today, it would equate to over half of all expenditure in New Zealand in one year,” international statistics senior manager Peter Dolan said.

“While still considered high, this quarter’s position is significantly lower than our record level in 2009. It’s regularly been reaching record lows in recent quarters.”