NZ posts Q1 current account surplus on cheaper oil, tourism

[WELLINGTON] New Zealand posted its first quarterly current account surplus in a year on lower oil prices and improved tourist spending, resulting in a slightly smaller than expected annual deficit, official data showed on Wednesday.

The actual quarterly surplus was NZ$0.66 billion (S$0.61 billion) in the three months to March 31 from a deficit of NZ$3.17 billion in the previous quarter.

The seasonally adjusted quarterly deficit was NZ$1.78 billion from NZ$2.53 billion in the previous quarter as the fall in imports was greater than the fall in exports.

The annual deficit to March 31 was NZ$8.6 billion, equating to 3.6 per cent of gross domestic product, the highest since the first quarter of 2013.

The worsening annual deficit was driven by a sharp fall in export earnings because of weaker dairy prices, which was partly offset by record spending by international visitors.

Economists polled by Reuters had forecast a quarterly surplus of NZ$0.24 billion, and an annual deficit of NZ$9.01 billion, equating to 3.8 per cent of GDP.

The country's net foreign liabilities, measured by international investment positions, narrowed to 64.2 per cent of GDP, the lowest since Q4 2001, because of changes in the value of financial derivatives and a rise in overseas equity prices.

Overseas owned company also paid lower dividends to their shareholders, while New Zealand investors overseas earned higher returns.

REUTERS