New Zealand Annual Trade Deficit Widens to Most in Three Years
New Zealand’s annual trade deficit swelled to the widest in more than three years in November as imports rose to a four-year high and a rising currency curbed returns from exports.
Imports exceeded exports by NZ$1.46 billion ($1.2 billion) in the 12 months ended Nov. 30, compared with a revised NZ$1.33 billion shortfall in the year through October, Statistics New Zealand said today in Wellington. Exports fell 2.1 percent from the year ended Nov. 30, 2011, while imports rose 1.7 percent.
New Zealand ended two years of annual trade surpluses in April, and deficits are widening as slowing demand in global markets curbs prices for dairy products, which make up a quarter of all exports. The New Zealand dollar’s 6.5 percent gain in the past 12 months compounds weaker returns for farmers and exporters.
“Conditions for exporters have been challenging, with global demand easing over 2012 while the New Zealand dollar has remained elevated,” Christina Leung, economist at ASB Bank Ltd. in Auckland, wrote in a Jan. 7 report. “We expect to see some improvement in demand conditions in 2013, however the currency will remain a headwind on returns.”
The local currency was little changed after the report, buying 83.95 U.S. cents at 10:49 a.m. in Wellington.
Prices for the nation’s commodity exports fell 6.7 percent in November from a year earlier, according to an index from ANZ Bank New Zealand Ltd. published in early December. Still, the annual decline is narrowing amid a 6.4 percent recovery in prices from the 28-month low reached in July.
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