Current account gap narrows to 3.3% of GDP on tourist influx
Tourism offsets weaker diary export prices.
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The country’s current account deficit narrowed in the third quarter as an influx of big-spending tourists made up for the impact of weaker dairy export prices.
The current account gap was $8.1 billion, or 3.3 % of gross domestic product in the 12 months ended September from a revised gap of $8.3 billion, or 3.4 % of GDP three months earlier, Statistics New Zealand says.
In the third quarter, the actual deficit blew out to $4.7 billion from a revised $1.17 billion in the second quarter, undershooting the $4.86 billion forecast in a Reuters survey.
The deterioration was led by imports rising faster than exports to record a deficit of $2.48 billion, from a surplus of $688 million three months earlier.
Prices of dairy products have gained in the past two GlobalDairyTrade auctions, but not enough to support Fonterra's forecast payout for the current season and leaving the global dairy market as a key risk for the domestic economy.
At the same time, tourists have flooded into New Zealand, driving up the annual services balance. Both the number of visitors to New Zealand and spend per visitor increased in the September quarter.
The annual surplus on services widened to $3.3 billion, the biggest since December 2004 when it reached $3.4 billion, from $2.78 billion three months earlier.
The travel exports component rose to a surplus of $12.4 billion from $11.7 billion, more than twice the value of travel imports at about $5.3 billion.
There was a net outflow of investment of $2.4 billion in the third quarter, as a $6.6 billion decrease in liabilities (outflow) was partly offset by a $4.2 billion decrease in assets (inflow).
New Zealand's net external debt position, which excludes financial derivatives and equity, improved slightly to $136.9 billion, or 56.1 % of GDP, from $137.8 billion, or 57 % three months previously. The net liability position worsened to $151 billion, or 61.9 % of GDP, from a revised $148 billion, or 61.3 %.
(BusinessDesk)
Jonathan Underhill
Wed, 16 Dec 2015
Wed, 16 Dec 2015
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Current account gap narrows to 3.3% of GDP on tourist influx
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