In the best of times, New Zealand is just not very good at earning its living as a trading nation.

And the times are set to get a lot worse.

In the year ended July, we ran a merchandise trade deficit of $5.5 billion. The annual deficit has ranged between $4.9b and $6.7b for the past year.


This is despite the fact that in this period the terms of trade have been exceptionally favourable.

The terms of trade is a measure of the international purchasing power of New Zealand's exports. An increase means this country can buy more imports