Current account deficit widens again

Deficit hits $7.3bn

Current account deficit widens again

New Zealand's seasonally adjusted current account deficit increased by $0.3 billion to $7.3 billion in the March quarter, Stats NZ reported.

Services exports fall

In the March quarter, the services deficit widened by $1.1bn due to a $0.9bn drop in services exports, driven primarily by reduced spending from overseas visitors.

“In the March 2024 quarter, the seasonal peak in visitor spending was less pronounced than it has been in the past,” said Paul Pascoe (pictured above), institutional sectors senior manager at Stats NZ. “Once seasonal factors were removed, the adjusted visitor spending fell.”

Goods exports rise

The goods deficit narrowed by $0.4bn, thanks to a $1bn increase in goods exports, particularly from fruit, dairy, logs, and wood products.

Goods imports also rose by $0.6 billion, largely driven by consumption goods such as clothing.

“Even though the goods deficit narrowed slightly this quarter, goods, services, and primary income have all been in deficit since the December 2020 quarter,” Pascoe said.

Primary income deficit narrows

The primary income deficit decreased by $0.5bn to $3bn, indicating New Zealanders earned less from overseas investments compared to foreign investors’ earnings in New Zealand, Stats NZ figures showed.

International investment position

New Zealand’s net international investment liability position was $199.1bn (48.7% of GDP) as of 31 March 2024, $11.2 billion narrower than the $210.3bn (52% of GDP) recorded on Dec. 31.

Annual deficit

The annual current account deficit stood at $27.6bn (6.8% of GDP) for the year ended March 31, slightly down from $27.9bn (6.9% of GDP) for the year ended Dec. 31.

A current account deficit indicates that New Zealand is spending more than it is earning overseas, reflecting its economic position, Stats NZ reported.

Read the Stats NZ media release. For the previous month’s results, click here.

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