The current account deficit widened to $2 billion in the June quarter as the profits of foreign-owed companies rose and tourist arrivals dropped.
The current account measures the difference between what New Zealand earns from the rest of the world through trade and investment and what the world earns from us.
The latest quarter's $2 billion (seasonally adjusted) shortfall was up from $1.5 billion in the March quarter and pushed the annual deficit to $7.5 billion or 3.7 per cent of gross domestic product.
While that is a lot better than the peak of $16.4 billion (8.9 per cent of GDP) recorded in the year to December 2008, the gap has been widening for the past five quarters.
Decades of deficits have accumulated at the country's net external debt. While still high it has been substantially revised down in the latest numbers.
More comprehensive data on New Zealanders' holdings of Australian shares, the overseas assets of the smaller managed funds and the inclusion of expatriates' student loans have lowered the historical track of net overseas liabilities by between $9 billion and $12 billion.
The latest net figure is also flattered by the inclusion of $12 billion of earthquake-related reinsurance claims which, until they are settled, are treated as New Zealand assets abroad.
This all leaves the net overseas debt position at $140 billion or 70 per cent of GDP.
It is down from a peak of 84.6 per cent of GDP in March 2009, but the improvement from 80.5 per cent a year ago is entirely explained by the temporary reinsurance claims, rather than any underlying reduction.
"While the improvements to the balance of payments are welcome, New Zealand's external vulnerability has not been revised away," said ANZ's head of market economics Khoon Goh.
"It does provide a bit more breathing space, and at the margin should be welcomed by credit rating agencies.
"However, the economy still needs to rebalance and this will take some time." In the June quarter, the goods balance was a surplus of $1 billion as exports increased by $181 million more than imports did.
The increase in exports was driven by higher prices - the terms of trade were at a 37-year high - rather than volumes which, overall, were flat, Statistics New Zealand said.
The balance on services was a $400 million deficit. Visitor numbers fell after the February earthquake and there were disruptions caused by the volcanic ash cloud from Chile.
On the other side of the ledger, a higher exchange rate made overseas trips more affordable for Kiwis.
The investment income balance was a deficit of $2.5 billion, up $371 million on the March quarter.
Foreign investors' earnings on equity investment in New Zealand rose $671 million to $1.6 billion of which $1 billion was repatriated in dividends, the largest outflow for two years.
"We expect the current account deficit will remain at around the 4 per cent of GDP mark throughout the remainder of the year before approaching 5 per cent of GDP by the end of 2012," Goh said.