New Zealand Trade Deficit Widens as Exports Drop to Lowest in Nine Months
New Zealand’s trade deficit widened in August as exports declined to a nine-month low, led by milk, butter and meat shipments and lower prices for products shipped abroad.
The shortfall was NZ$437 million ($323 million), after a revised NZ$183 million in July, Statistics New Zealand said today in Wellington. The median estimate in a Bloomberg News survey of nine economists was for a NZ$417 million deficit.
Falling exports add to signs that New Zealand’s expansion has moderated, held back by declining business confidence and slowing economies overseas even before counting the impact of the worst earthquake in eight decades. Central bank Governor Alan Bollard has little incentive to resume raising interest rates, economist Mark Smith said.
“Today’s data reaffirms the case for the Reserve Bank to remain on the sidelines until global developments improve,” said Smith, an economist at ANZ National Bank Ltd. in Wellington. “The extent of the fall in export values was weaker than we had expected. The weakening trend in commodity export prices suggests there could be more to come.” Smith expects the Reserve Bank of New Zealand to keep its benchmark rate unchanged until March.
New Zealand’s dollar was little changed after the report, buying 73.91 U.S. cents at 11:50 a.m. in Wellington from 73.90 cents immediately before the report.
‘Bumpy’ Growth
The economy grew 0.2 percent in the three months ended June 30, according to government figures published this month. Finance Minister Bill English said last week the recovery “will be bumpy at times” after second-quarter growth unexpectedly weakened.
Bollard on Sept. 16 left the official cash rate at 3 percent. The RBNZ next meets on Oct. 28.
August’s trade shortfall was still smaller than the NZ$717 million deficit recorded in the same month a year earlier. As a result, the trade surplus for the 12 months through August 2010 widened to NZ$866 million. Economists expected a NZ$869 million surplus.
The monthly figures aren’t seasonally adjusted. Exports fell 12 percent from July to NZ$3.15 billion, led by dairy products and meat, today’s report showed. New Zealand’s milk, wool and meat production typically peak in May.
Commodity Prices
Prices of commodity exports dropped for a third month in August, declining 1.4 percent, according to an index calculated by ANZ National.
Milk powder, butter and cheese exports, which make up a fifth of overseas sales, slumped 33 percent from July. Meat sales dropped 31 percent. Shipments of fruit and crude oil also fell. Wine sales increased.
Imports declined 4.1 percent from July to NZ$3.59 billion, the first drop in four months. Crude oil purchases fell to the lowest since February as the volume imported declined 22 percent. Prices were little changed.
Purchases of consumption goods exceeded NZ$1 billion for the first time since December 2008. Passenger car imports also increased.
To contact the reporters on this story: Tracy Withers in Wellington at twithers@bloomberg.net;
To contact the editor responsible for this story: Chris Anstey at canstey@bloomberg.net
Rate this Page