N.Z. Trade Deficit Widens


New Zealand's annual trade deficit unexpectedly widened for the first time in four months as plunging world commodity prices crimped demand for exports.

The gap widened to NZ$4.99 billion ($2.8 billion) in the 12 months ended Sept. 30 from NZ$4.37 billion in the year through August, Statistics New Zealand said in Wellington today.

Exports fell to the lowest level since January, taking the trade deficit to the widest this year, as a slowing global economy curbed demand. Weak exports, which make up 30 percent of the economy, add to signs New Zealand may not recover from a recession until next year.

The economy contracted in the first half of 2008, the first recession since in 10 years. The Reserve Bank last month said demand probably also declined in the third quarter.

Prices of New Zealand's commodity exports dropped 4.9 percent from August, the most in 21 years, led by dairy products, according to an index compiled by ANZ National Bank Ltd.

New Zealand's currency has dropped 26 percent against the U.S. dollar the past six months.

Exports rose 8 percent in September from a year earlier to NZ$3.17 billion. The annual increase has averaged about 30 percent over the previous three months.

Sales of milk powder, butter and cheese, which make up almost one-fifth of overseas shipments, fell 4.8 percent from a year earlier. Machinery and wood pulp shipments also declined. Exports of crude oil rose 15 percent.

Third-quarter, exports gained 5.4 percent from the second quarter, the statistics agency said. Excluding prices, exports of butter, milk and cheese rose 2.4 percent. Volumes of oil exports and aluminum fell.

Imports increased 24 percent to NZ$4.35 billion in September from a year earlier, the statistics agency said.

The figures aren't adjusted for inflation and reflect higher prices for imports as well as actual shipments. Fuel imports surged 35 percent as prices increased from a year earlier, the statistics agency said.

Machinery imports increased and purchases of fertilizer jumped to NZ$174 million from NZ$44 million a year earlier, the agency said.

Economists monitor the rolling, 12-month trade balance because of volatility in the month-on-month figures, which aren't seasonally adjusted.

In September, there was a NZ$1.18 billion trade deficit compared with an NZ$572 million gap a year earlier. Economists expected a NZ$550 million deficit.

 


TradingEconomics.com, Bloomberg.com
10/29/2008 1:39:49 AM