NZ imports rise to record high in 2015 as kiwi dollar declines

New Zealand imports rose to a record high last year as a decline in the value of the currency pushed up values.

The country's imports increased 2.5% to $52.53 billion compared with the year earlier, according to data from Statistics NZ. Annual exports slid 2.2% to $49 billion. The annual trade deficit increased to $3.55 billion from $1.18 billion in 2014, and is the largest for a calendar year since 2008, the agency said.

The New Zealand dollar slipped about 12% against the US dollar last year as falling commodity prices, particularly for dairy products, weakened the country's growth prospects, while a pickup in the US economy bolstered the greenback. That increased the cost of importing goods into the country.

"The depreciating New Zealand dollar has an upward effect on import and export prices," Statistics NZ international statistics senior manager Jason Attewell said. "Imports rose $1.3 billion but exports fell $1.1 billion as the impact of falls in world prices, such as for dairy products, was greater than the upward exchange rate effect."

The rise in imports was broad-based and was led by consumption goods such as clothing, toys and games, which increased 13% to $13.48 billion. Imports of capital goods rose 4.6%, led by a 5.8% increase in machinery and plant imports.

Offsetting the increases, the value of annual crude oil imports slid by about a third on the back of lower prices.

Meanwhile, the drop in export values was led by dairy products, which slid 21% to $11.53 billion, with China accounting for two-thirds of the fall. The decline was led by a 31% drop in milk powder.

Still, the quantity of dairy exports rose 2.9% to a record high of 2.9 million tonnes, the agency said. China was the largest market, accounting for 21% of the total, down from 28% in 2014.

For the December month, exports rose 0.6% to $4.43 billion from a year earlier, led by logs and wine. December imports slid 2.6% to $4.48 billion, led by a drop in crude oil and transport equipment. Excluding the volatility of large capital items, goods imports rose 2.6%, the agency said.

The December trade deficit was $53 million, compared with expectations for a monthly deficit of $131 million in a Reuters poll of economists.

(BusinessDesk)