Unexpectedly large trade deficit in Sept, dairy exports weak
Statistics NZ said the trade deficit widened to $1.22 billion in September.
New Zealand's trade deficit widened unexpectedly last month as dairy exports declined and imports remained stronger than anticipated.
Statistics New Zealand said the trade deficit widened to $1.22 billion in September, from $1.08 billion in August, larger than the $825 million deficit forecast by economists. That compares with a $1.36 billion deficit in September last year.
The country's exports rose 2% to $3.69 billion in September, lagging behind the $3.9 billion expected by economists.
Shipments of meat and edible offal rose 33% to $438 million from the year earlier, led by frozen beef, which gained 69% due to higher prices, helping the 2014/15 beef export season reach a record $3.2 billion, the agency said.
Offsetting that, exports of milk powder, butter and cheese fell 32% to $4.91 billion from the year-earlier month, led by a 32% decline in whole milk powder. The quantity of whole milk powder fell 11% from the same month a year earlier.
Meanwhile, New Zealand imports in September fell 1.3% to $4.91 billion, still ahead of the $4.78 billion expected. Imports of capital goods fell 17% with transport equipment down 55%, led by a reduction in aircraft imports. However, underlying imports were strong. Excluding large capital items, September imports rose 8.1% to a record, the agency said.
"The trade balance was weaker than expected, largely due to lower exports," ASB senior economist Jane Turner said in a note. "Much of the weakness was due to a decline in dairy exports. Weak dairy production and export volumes highlight the direct drag this sector will have on the New Zealand economy."
The New Zealand dollar fell as low as 67.53USc, from 67.82USc immediately prior to the 10.45am release. It recently traded at 67.71USc.
In the year through September, the annual deficit was $3.24 billion, larger than the $2.85 billion deficit expected by economists.
(BusinessDesk)
Tina Morrison
Tue, 27 Oct 2015
Tue, 27 Oct 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Unexpectedly large trade deficit in Sept, dairy exports weak
52844