Business News Update : NZ’s current account deficit widen over rise in imports

Insight Online News

Wellington, March 17 : New Zealand’s current account deficit widened by 1.6 billion NZ dollars ($1.15 billion) to 2.1 billion NZ dollars in the December 2020 quarter, the statistics department Stats NZ said on Wednesday.

“The widening of the quarterly deficit was driven by a rise in goods imports and a fall in services exports, which includes spending by overseas visitors in New Zealand,” international statistics senior manager Darren Allan said in a statement.

Imports of crude oil and motor cars fell sharply early in 2020, following Covid travel restrictions, but those imports have since partially risen towards pre-Covid levels, Allan said.

For the third quarter in a row, on a seasonally adjusted basis, New Zealand exported more goods than it imported. However, as imports recovered, the goods surplus narrowed to 215 million NZ dollars in the quarter, he said.

Imports of goods were 14.5 billion NZ dollars, up by 1 billion NZ dollars from the September quarter, largely due to the recovery in imports of crude oil and motor cars, statistics showed, Xinhua reported.

“Goods imports have increased in the September and December 2020 quarters, from the low in the June 2020 quarter, after Covid-19 lockdown restrictions eased,” Allan said.

“However, goods imports continue to remain lower than they were in 2018 and 2019,” he said.

The rise in goods exports was mainly driven by an increase in fish, crustaceans, and molluscs; and milk powder, butter, and, cheese, according to Stats NZ.

“For the second time in 2020, New Zealand had a services balance deficit,” Allan said, adding travel restrictions because of Covid-19 have seen a sharp drop in overseas visitors.

Over the past 20 years, New Zealand typically earned more from selling services overseas (for instance, spending by international visitors on flights and hotels) than on buying services from overseas, he said.

In the December 2020 quarter, New Zealand’s services balance was a deficit of 677 million NZ dollars, compared with a 389 million NZ dollars surplus in the September 2020 quarter, he added.

The services deficit was driven by a fall in services exports and travel exports, including spending by international tourists in New Zealand, as well as transport exports, spending on passenger flights and cargo.

IANS

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