Trade deficit widest in a decade

Rising demand for imported goods has pushed New Zealand’s trade balance to its widest deficit for a June year in a decade, Statistics New Zealand said.

The country’s annual trade deficit widened to $4 billion in the June year, from a deficit of $3.66b a year earlier, Stats NZ said. Annual imports increased by $6.02b to $59.55b, while exports rose by $5.65b to $55.52b.

“The last June year surplus was in 2014, driven by high dairy export values,” acting international statistics manager Dave Adair said. “Exports dipped in 2015 leading to a deficit, which has widened since due to steadily rising imports.”

The latest rise in annual imports was led by $24b of intermediate goods, up $3b from the year earlier, the statistics agency said. Petroleum and products, excluding petrol, led the intermediate goods rise, up by $850 million. This was followed by parts of transport equipment, up $416m, and parts of plant and machinery, up $413m.

The gain in annual exports was mostly due to an increase in dairy products, the country’s largest export commodity group, which rose by $1.65b to $14.16b. That was followed by a $1.01b gain in the value of meat and edible offal exports to $7.05b, and a $740b increase in the value of forestry product exports to $4.96b.

For the June month, New Zealand imports jumped to $5.02b from $4.45b in June last year, and marking the highest ever level for a June month. The increase was led by petroleum and products, which gained $257m as fuel imports rose by $300m while crude oil fell by $35m, Stats NZ said.

The value of exports in June rose $217m to $4.91b, led by a $58m increase in the value of meat and edible offal exports as lamb exports to China rose $26m. Kiwifruit and preparations of milk, cereals, flour, and starch also contributed to the exports rise.

The export gains were partly offset by an $84m decline in the value of milk powder, butter, and cheese exports in the month to $1.12b. Milk powder exports fell by $162m, or 25 per cent