October’s NZ trade deficit up
AUCKLAND: New Zealand’s monthly trade deficit widened in October as demand for imported mechanical machinery offset gains in the value of the country’s export commodities with renewed appetite from Chinese buyers.
The country’s trade deficit was $871 million in October compared with $798 million a year earlier, Statistics New Zealand said. The value of imports climbed 15% to
$5.43 billion in October, driven by a 3% jump in purchases of mechanical machinery and equipment to $777 million, including items such as jet parts and computers. That offset a 16% increase in exports to
$4.56 billion.
‘‘Intermediate goods, used as ingredients or inputs into the production of other goods and services, were the leading contributor to the increase in imports in October,’’ international statistics manager Tehseen Islam said in a statement.
The higher cost of imports coincides with a slump in the kiwi dollar, which makes foreign purchases more expensive, and the tradeweighted index was down 2.8% from a year earlier. Policymakers have long complained about the strength in the exchange rate as putting undue pressure on exporters and sapping inflationary stimulus on imported goods.
Friday’s figures show the exports of milk powder, butter and cheese rose 22% to
$1.29 billion in October from the same month a year earlier, while meat and edible offal exports climbed 20% to $378 million, and logs, wood and wood articles exports jumped 27% to
$461 million. Fruit exports fell 41% to $86 million in the month.
The annual trade balance was a deficit of $2.99 billion, narrowing from a deficit of
$3.25 billion in the October 2016 year, with exports climbing 6.3% to $51.78 billion and imports rising 5.4% to $54.78 billion.
ASB Bank rural economist Nathan Penny said in a note that the monthly deficit was slightly wider than expected due to a $257 million oneoff imported item, and excluding that was largely in line with predictions.
Data showed Chinese demand for New Zealand exports kept rising. — BusinessDesk