New Zealand's annual current account deficit widened to a four-year high as a reviving economy took in more imports and foreigners continued to reap greater profits here than kiwi firms garnered abroad.
The current account gap widened to $8.8 billion, or 4.1 per cent of gross domestic product, in the year ended September 30, according to Statistics New Zealand. The actual deficit in the latest quarter widened to $4.78 billion from a revised $1.3 billion three months earlier. A quarterly gap of $4.3 billion and an annual deficit of $8.83 billion, or 4.1 per cent of GDP, were forecast in a Reuters survey.
Today's release is the first to incorporate revised statistics that include an improved surveying of spending by international visitors and students and an estimate of imports of goods below NZ Customs' $1,000 threshold. The government statistician said goods under $1,000 have become more important as kiwis buy more via the internet from overseas.
The data improvements lowered the current account gap as a percentage of GDP to an average 4.8 per cent over the past 10 years from 5.6 per cent, the department said.
In the third quarter, the balance on goods turned to a deficit of $1.8 billion from a surplus of $1.1 billion three months earlier. This was mainly driven by a jump in imports to $12.9 billion, a record for the series, from $11 billion, while exports fell to $11 billion from $12 billion.
The balance on income had the biggest negative impact on the current account gap, at a deficit of $2.2 billion, little changed from the third quarter. The income outflow was $3.9 billion, up from $3.77 billion in the second quarter, while the inflow improved to $1.7 billion from $1.5 billion.
The balance on services was a deficit of $581 million from a revised gap of just $7 million three months earlier. The balance on current transfers was a deficit of $149 million.
The nation's financial account showed a net investment outflow of $507 million in the third quarter as non-residents withdrew $1.8 billion of investments from New Zealand, outpacing a $1.3 billion withdrawal of New Zealand investments abroad.
Net international debt fell by $2.6 billion to $145.6 billion at Sept. 30 compared to June 30, as a $9.2 billion decline in borrowing was partly offset by a $7.1 billion fall in lending. Some $9.2 billion of the decline in borrowing related to banking sector borrowing.
Banking sector international debt was $101.6 billion, the lowest since March 2007.
The net international equity position at Sept. 30 was - $4.5 billion, the lowest position since the fourth quarter of 2005.