Profits heading offshore show in NZ deficit

By Phil Boeyen, ShareChat Business News Editor

Friday 23rd March 2001

Higher profits from New Zealand companies are being blamed for increasing the country's balance of payments deficit.

Latest figures show the current account deficit for the three months to the end of December was $1.9 billion, a rise of $342 million after adjusting for seasonal factors. The rise follows two quarterly decreases in a row.

Deputy government statistician, Ian Ewing, says gains by overseas investors from higher profits earned by New Zealand firms more than offset gains from increased exports.

"Total income earned by overseas investors in New Zealand rose $374 million between the September and December 2000 quarters.

"The slowdown in the Australian economy appears to have affected the profits from New Zealand subsidiaries abroad, with income from direct investment abroad by New Zealand companies falling $189 million between the September and December 2000 quarters."

Mr Ewing says the seasonally adjusted goods surplus increased $320 million between the September and December 2000 quarters as a result of higher goods prices combined with increased export volumes.

"The value of seasonally adjusted goods exports rose $802 million, more than offsetting a $482 million increase in the value of imports."

Statistics New Zealand says growth in the number of New Zealanders travelling abroad, combined with higher freight and port charges, increased expenditure on travel and transportation service imports in the latest quarter by $162 million.

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