The shortfall narrowed to NZ$1.16 billion ($830 million) in the 12 months ended Oct. 31 from a revised NZ$1.67 billion in the year through September, the statistics bureau said. The gap was the narrowest since November 2002.
The trade deficit has narrowed to less than a fifth of its size at the start of the year as the nation’s worst recession in three decades curbed demand for imports. Purchases of imported cars and computers rise may next year as the economy recovers, while a rising currency will curb exports, adding to signs the deficit may begin widening.
The current account gap, the broadest measure of trade because it includes tourism and investment, was the narrowest in four years in the 12 months through June 30.
Economists monitor a rolling, 12-month trade balance for New Zealand because of volatility in the month-on-month figures, which aren’t seasonally adjusted. In October, there was a trade deficit of NZ$487 million. Economists expected a NZ$480 million gap.
Imports in October posted their seventh straight decline from a year earlier, falling 28 percent to NZ$3.45 billion, the statistics agency said.
The drop was led by purchases of crude oil, jet fuel and earth-moving machinery, the agency said. Consumption goods imports also fell, led by wine and pleasure boats.
The monthly figures don’t adjust for prices. The value of oil imports dropped 49 percent from a year earlier after prices fell 41 percent.
Imports declined after the economy slumped into a recession in the first quarter of last year, curbing demand for cars and computers. The economy unexpectedly grew 0.1 percent in the second quarter of this year and economists say a gradual recovery in the second half of 2009 will stoke imports.
Exports in October fell 22 percent from a year earlier to NZ$2.97 billion, led by dairy products, logs and seafood, today’s report showed.
Overseas shipments of milk powder, butter and cheese, which make up almost one-fifth of total exports, declined 32 percent. Powder sales fell 35 percent even as volumes exported increased 36 percent, because of falling prices, the agency said.
Exports earnings are falling because the New Zealand dollar’s gains are more than offsetting rising world prices of meat, wool and aluminum. The currency has increased 31 percent against the U.S. dollar in the past 12 months.