New Zealand’s annual trade deficit swelled to the widest since 2009 as exports fell to a 20-month low amid a decline in dairy shipments and a rising currency.
Imports exceeded exports by NZ$888 million ($726 million) in the 12 months ended Sept. 30 compared with a revised NZ$885 million shortfall in the year through August, Statistics New Zealand said today in Wellington. Exports fell 0.1 percent in the year to September, while imports increased 3.4 percent.
New Zealand ended two years of annual trade surpluses in April and deficits are widening as milk production is in a seasonal decline and the weak outlook for the global economy curbs demand for shipments abroad, which make up 30 percent of gross domestic product. The New Zealand dollar’s 5.3 percent gain this year adds to weaker returns for farmers and exporters.
“Large deficits are experienced in September due to seasonally low milk production,” Philip Borkin, an economist at Goldman Sachs New Zealand Ltd. in Auckland, said in an Oct. 19 note. “While dairy prices have begun to recover, this will take time before it flows through into the official trade accounts.”
New Zealand’s dollar was little changed after the report, buying 81.87 U.S. cents at 10.48 a.m. in Wellington.
The annual deficit was narrower than the NZ$914 million median estimate in a Bloomberg News survey of eight economists. It was the biggest gap since the 12 months ended Oct. 31, 2009.
New Zealand had a monthly trade deficit of NZ$791 million, less than the NZ$850 million shortfall predicted by economists.
Exports fell 3.9 percent from the year-earlier month to NZ$3.31 billion and were the lowest since January 2011, today’s report showed. Economists predicted NZ$3.3 billion. Sales of dairy products, which make up a quarter of annual exports, declined 12 percent.
Central bank Governor Graeme Wheeler yesterday said the nation’s high currency was “undermining export earnings” and encouraging imports. He kept the official cash rate at a record-low 2.5 percent.
Imports fell 3.1 percent in September from a year earlier to NZ$4.1 billion. Economists predicted NZ$4.2 billion.