New Zealand Annual Trade Deficit Widens


New Zealand's annual trade deficit unexpectedly widened in April as imports were buoyed by the purchase of an oil platform and production vessel, outpacing an increase in exports.

The gap grew to NZ$4.65 billion ($3.7 billion) in the 12 months ended April 30 from NZ$4.53 billion in the year through March, Statistics New Zealand said.

The one-time purchases, relating to exploration of the Kupe oil and gas discovery off the west coast of the nation's North Island, bolstered imports. Exports rose twice as much as economists on higher global prices for dairy products.

New Zealand's dollar bought 78.45 U.S. cents at 11:20 a.m. in Wellington from 78.51 cents immediately before the report

In February, the annual trade balance fell to NZ$4.42 billion, the narrowest in almost three years.

Last month, the Treasury department forecast dairy production would be 2 percent less this season than a year earlier because of a drought. Economic growth may be 1.5 percent this year, the slowest since 1998, according to the median estimate of 10 economists surveyed by Bloomberg News.

Economists monitor the rolling, 12-month trade balance because of volatility in the month-on-month figures, which aren't seasonally adjusted. In April, there was a NZ$334 million trade deficit compared with NZ$215 million a year earlier. Economists expected a NZ$150 million gap.

Exports rose 20 percent from a year earlier to NZ$3.80 billion. Economists forecast a 9.7 percent increase.

Sales of milk powder, butter and cheese, which make up almost one-fifth of overseas shipments, increased 21 percent to in April from a year earlier. The value of milk powder exports rose as higher prices offset a fall in volumes, the agency said.

Exports of crude oil gained to NZ$311 million last month from NZ$43 million a year earlier. Following the commencement of production at the Tui field in July, oil is now New Zealand's third-largest export after dairy and meat.

Exports of meat, fish and fruit also rose. Log, lumber and aluminum sales declined, the agency said.

Prices for commodities, which make up 70 percent of total overseas shipments, rose 21 percent from a year earlier, according to an index compiled by ANZ National Bank Ltd.

Imports surged 22 percent to NZ$4.13 billion in March from a year earlier, after the inclusion of an oil platform and an oil production vessel together worth NZ$477 million, the statistics agency said. The year-earlier month included a production vessel worth NZ$231 million.

Oil and fuel imports rose 13 percent from a year earlier and there were increased purchases of electrical machinery and textiles. Imports of consumer goods gained 14 percent.

 


TradingEconomics.com, Bloomberg
5/26/2008 8:05:57 AM