New Zealand posted its widest annual current account deficit since 2009, as the rising cost of imported fuel helped narrow the nation's goods and services surplus.
The annual deficit widened to $10.5 billion, or 3.6 per cent of gross domestic product, versus an annual deficit of $7.4b, or 3.3 per cent of GDP, in the prior year, Statistics New Zealand said. Economists had anticipated the widening shortfall, projecting an annual deficit of 3.6 per cent of GDP in a Bloomberg poll.
The goods and services balance remained in the black with the country earning slightly more from exports such as meat, dairy and logs, than what was spent on imported goods. However, that surplus narrowed to $451 million from $2.6b a year earlier.
Stats NZ said the income component of the current account - which measures the income New Zealanders earn overseas against what foreigners earn in New Zealand - also contributed to the wider deficit.
"The income that foreign investors earned in New Zealand increased more than the income New Zealand investors made abroad," said international statistics senior manager Peter Dolan.
According to Stats NZ, income from foreign-owned New Zealand companies was up $1.6b on the year at $19.4b. "Despite large bank profits, it was non-financial companies leading the increase, not the banks," said Dolan.
The $11b income deficit compared to a $10b shortfall a year earlier. That includes the primary income component of domestic versus foreign earnings on investments, and the secondary income component that covers international transfers such as non-resident withholding tax.
In 2009, the current account deficit dropped from a record peak of 7.8 per cent of GDP to 2.2 per cent and has hovered between 2 per cent and 4 per cent since.
On a quarterly basis, the unadjusted deficit was $6.1b in the three months to September 30, versus a revised second-quarter deficit of $1.6b, Stats NZ said.
The goods balance widened to $3.2b deficit in the September quarter from a surplus of $193m in the June quarter. The services balance showed a deficit of $300m versus a surplus of $912m.
In seasonally adjusted terms, however, the current account deficit was $2.56b in the September quarter, down from $2.66b in the June quarter.
According to Stats NZ, the seasonally adjusted goods deficit was $997m in the September quarter, $343m narrower than in June. This was due to a $750m rise in goods exports as the value of dairy, meat and log exports rose. Crude oil led the $407m increase in goods imports, it said.
New Zealand's net international liability position was $156.2b, or 53.7 per cent of GDP, versus $154.5b at the end of June or 53.6 per cent.
The value of New Zealand's international assets was $269.2b as of September 30, versus $270.5b at the end of June. The fall was due to a withdrawal in assets held abroad and financial derivative valuation changes.