January trade deficit not as bad as expected

New Zealand's January trade deficit - provisionally estimated at $318 million - bettered expectations for the second month running, this time with lower than anticipated imports featuring rather than December's robust export result.

Statistics New Zealand (SNZ) said merchandise imports for the month were worth $2.57 billion while its preliminary estimate of merchandise exports was $2.26 billion.

Economists polled by Reuters had on median expected imports of $2.73b and exports of $2.2b for the month and a deficit of $551m.

While December's $521m deficit was achieved on better than expected export receipts - largely due to dairy exports - a drop in the value of imported large items such as armoured vehicles and aircraft was behind the surprisingly slim January import figure.

But SNZ said this masked an underlying rise in imports - 6.4 per cent excluding large items.

Driving this underlying increase was a 22.5 rise in the value of motor vehicle imports - mainly passenger cars, trucks and tractors.

The value of cars imported over the month rose 18 per cent compared to January 2004 largely on an increase in used car imports.

The value of trucks imported rose 19.7 per cent and the value of tractors rose a whopping 50.5 per cent to a one month record of $31 million.

Today's numbers brings the January year trade deficit to an estimated $3.93 billion - down from $4.2 billion in the year to December 2004 but up from $3.62 billion in the year to January 2004.

Detailed export data will be released on March 7.

- NZPA