Record $10.5 billion annual trade deficit as fuel price hits economy

High import costs for refined fuel has driven a record trade deficit. Photo / NZME

The economy has posted a record annual trade deficit on the back of surging fuel prices.

Stats NZ data showed a deficit of $10.5 billion between export earnings and import costs for the year ended June, the highest annual deficit since current records began in 1960.

For the month of June the deficit was $701 million, a record for any June month, as growth in imports, notably refined fuel, outstripped the gain in exports.

"Since the recent closure of the Marsden Point refinery, more refined petrol and diesel are being imported," Stats NZ manager Alasdair Allen said.

"The value-adding, which occurs offshore prior to arriving in New Zealand, contributes to the increases in the total import value."

Petroleum and products imports rose $795m (206 percent) to $1.2b in June on the same month a year ago after the closure of the refinery.

The rise in volumes and prices reflected the rebound from last year's Covid-19 restrictions which had dampened demand, as well the rise in global prices.

Stats NZ said the average value for each unit of imported fuel rose 133 percent for diesel and 125 percent for petrol.

Rises in the import of machinery and equipment also drove up the monthly import bill of $7.1b, up 25 percent on a year ago.

Meat and dairy continued to dominate exports, which lifted 7.7 percent to $6.4b.