New Zealand posts smallest annual trade deficit in 30 months
NEW Zealand posted its smallest annual trade deficit in more than two years as a weak economy curbed demand for imports.
The shortfall was NZ$9.1 billion (S$7.2 billion) in the 12 months to September, Statistics New Zealand said on Tuesday (Oct 22) in Wellington. That is the narrowest since March 2022 and compares with a record NZ$17.1 billion deficit in May last year.
New Zealand typically runs an annual trade deficit as it needs to import oil, transport equipment and many raw materials that are not produced locally.
However, the cumulative impact of high interest rates to 2023 and much of 2024 has stalled economic growth and resulted in a slump in business investment.
The Reserve Bank of New Zealand began easing monetary policy in August and the decline in imports is showing signs of stabilising after reaching the lowest level in two years in June.
Imports in the 12 months to September fell 8.4 per cent from a year earlier to NZ$78.5 billion but were little changed from August.
Annual imports of plant and machinery fell 11 per cent from the year-earlier period, while passenger vehicle imports slumped 23 per cent.
The result suggests the current account deficit, a broader measure of trade that includes investment flows and services such as tourism, will narrow further. The gap was NZ$27.6 billion or 6.7 per cent of gross domestic product in the year to June, having reached a record 9.4 per cent of GDP at the end of 2022.
The trade deficit is narrowing even as annual exports also slow. The value of overseas shipments was NZ$69.4 billion in the year to September, down 1.2 per cent from a year earlier.
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