The TPP agreement seeks a trade agreement spanning the Pacific Rim and currently involves 12 countries: New Zealand, Australia, the United States, Canada, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Peru, and Mexico.
The TPP agreement seeks a trade agreement spanning the Pacific Rim and currently involves 12 countries: New Zealand, Australia, the United States, Canada, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Peru, and Mexico.
New Zealand's current account deficit widened in the fourth quarter, pushing the annual gap to 3.3 per cent of gross domestic product, as a growing economy helped foreign companies earn more from local investments.
The current account deficit widened to $2.6 billion, seasonally adjusted, the largest since the fourth quarterof 2008, and from about $2.4 billion three months earlier, according to Statistics New Zealand. The annual deficit was $7.8 billion, about matching the forecast in a Reuters survey, from a deficit of $6.1 billion, or 2.6 per cent of GDP, in the year ended September 30.
The current account is the broadest measure of the flow of goods and services across the border and a widening gap traditionally signals a risk for the currency as it shows a nation is spending more than it earns. The income deficit grew by $434 million to $2.8 billion, the highest since the fourth quarter of 2010, reflecting more income earned from foreign investments in New Zealand and less income earned from investments abroad.
"Companies tend to earn higher profits when the economy is growing," said Jason Attewell, the government statistician's international statistics manager.
"Most of this quarter's increase in profits earned by foreign-owned companies in New Zealand was reinvested back into the company," he said. "In addition, companies were able to pay more dividends to their overseas portfolio shareholders this quarter, reflecting recent growth in the New Zealand economy."
The actual current account deficit was $3.19 billion in the latest quarter, about matching the forecast in the Reuters survey of $3.15 billion, and narrower than the $5.01 billion gap in the third quarter.
Companies tend to earn higher profits when the economy is growing
The increase in the annual deficit was largely driven by a decline in the goods surplus, reflecting weaker dairy prices, while a range of imported commodities rose.
The balance on services turned to a surplus of $655 million in the fourth quarter, up from $424 million three months earlier, which mainly reflected an increase in exports of travel services, driven by overseas visitors spending more.
The fourth-quarter data shows a $3.8 billion net inflow of investment into New Zealand, mainly reflecting foreign companies increasing their equity in local subsidiaries and also foreigners investing in New Zealand-owned companies. New Zealand investment abroad of $423 million reflected local fund managers buying overseas shares, which was offset by the Reserve Bank reducing overseas reserves, the government statistician said.
New Zealand's net international liability position increased to $153.9 billion, or 64.7 per cent of GDP as at December 31, from a revised $152 billion, or 64.2 per cent, at Sept. 30.
Still, the nation's net external debt position, which excludes equity and financial derivatives, fell to $141.3 billion, or 59.4 per cent of GDP at the end of 2014, from $142.2 billion, or 60.1 per cent three months earlier. That reflected New Zealand companies borrowing less from their foreign parents in the latest quarter, Statistics New Zealand said.
