Balance of payments improves

By Phil Boeyen, ShareChat Business News Editor

Tuesday 26th June 2001

New Zealand's balance of payments deficit has fallen for the fifth quarter in a row.

Figures show the country recorded a current account surplus of $95 million for the March quarter, and after adjusting for seasonal factors the current account balance was a deficit of $1.007 billion.

Since the June quarter last year increasing surpluses in the trend estimate for the goods and services balance have offset increasing quarterly deficits in the income and transfers balance.

The latest deficit is $571 million smaller than in the December quarter, reflecting rising export earnings and a fall in income from foreign investment, caused partly by mixed profit results and lower earnings from overseas subsidiaries.

Statistics New Zealand says export receipts from primary products have risen steadily since the June 1999 quarter, and growth in visitor numbers have increased receipts from travel services.

In the March 2001 quarter seasonally adjusted exports and imports of goods have both fallen, however, import prices fell by more than export prices.

For the year ended March 2001, the current account balance recorded a $5.338 billion deficit - $804 million less than the year ended December 2000.

$2,053 million less than the year ended March 2000 deficit of $7,391 million.

Finance Minister, Michael Cullen, says the latest figures are in line with Treasury forecasts for the deficit to fall to 3.5% of GDP by 2005.

He says although the annual figure remains in deficit, it has strengthened by over $2 billion over the year ended March 2000 and is now at 5 percent of gross domestic product.

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