Current account deficit widens

AUCKLAND: New Zealand posted its widest annual current account deficit since 2009, as the rising cost of imported fuel helped narrow the nation’s goods and services surplus.

The annual deficit widened to $10.5 billion, or 3.6% of gross domestic product, versus an annual deficit of $7.4 billion, or 3.3% of GDP, in the previous year, Statistics New Zealand said.

Economists had anticipated the widening shortfall, projecting an annual deficit of 3.6% of GDP in a Bloomberg poll.

The goods and services balance remained in the black with the country earning slightly more from exports such as meat, dairy and logs, than what was spent on imported goods. However, that surplus narrowed to $451 million from $2.6 billion a year earlier.

Stats NZ said the income component of the current account — which measures the income New Zealanders earn overseas against what foreigners earn in New Zealand — also contributed to the wider deficit.

‘‘The income that foreign investors earned in New Zealand increased more than the income New Zealand investors made abroad,’’ international statistics senior manager Peter Dolan said.

According to Stats NZ, income from foreignowned New Zealand companies was up $1.6 billion on the year at $19.4 billion. ‘‘Despite large bank profits, it was nonfinancial companies leading the increase, not the banks,’’ Mr Dolan said.

The $11 billion income deficit compared to a $10 billion shortfall a year earlier. That includes the primary income component of domestic versus foreign earnings on investments, and the secondary income component that covers international transfers such as nonresident withholding tax.

In 2009, the current account deficit dropped from a record peak of 7.8% of GDP to 2.2% and has hovered between 2% and 4% since.

On a quarterly basis, the unadjusted deficit was $6.1 billion in the three months to September 30, versus a revised secondquarter deficit of $1.6 billion, Stats NZ said.

The goods balance widened to $3.2 billion deficit in the September quarter from a surplus of $193 million in the June quarter. The services balance showed a deficit of $300 million versus a surplus of $912 million.

In seasonally adjusted terms, however, the current account deficit was $2.56 billion in the September quarter, down from $2.66 billion in the June quarter.

According to Stats NZ, the seasonally adjusted goods deficit was $997 million in the September quarter, $343 million narrower than in June. This was due to a $750 million rise in goods exports as the value of dairy, meat and log exports rose. Crude oil led the $407 million increase in goods imports, it said.

New Zealand’s net international liability position was $156.2 billion, or 53.7% of GDP, versus $154.5 billion or 53.6% at the end of June.

The value of New Zealand’s international assets was $269.2 billion as of September 30, versus $270.5 billion at the end of June. — BusinessDesk