MNI New Zealand Current Acct Posts Widest Deficit Since 2009

By Sophia Rodrigues

     SYDNEY (MNI) - New Zealand's annual current account deficit widened more

than expected in the second quarter due mainly to rise in primary income

deficit. The annual deficit was the largest since the year ended June 2009.

     Data published by Statistics New Zealand Wednesday showed annual current

account deficit widened to 3.3% of GDP in Q2, compared with 2.6% deficit in the

same quarter the year before. MNI median forecast for a deficit of 2.9% of GDP.

     In Q2, the economy recorded a deficit in current account of NZ$1.7 billion,

marking a sharp reversal from a NZ$88 million surplus in Q1. This was despite a

surplus in goods balance of NZ$192 million compared with a deficit of NZ$385

million in Q1. Trade in services recorded a surplus but this was significantly

narrower than Q1.

     There was a deficit in primary income of NZ$2.5 billion in Q2 compared with

NZ$2.6 billion in Q1.

     For the year to June, the deficit in primary income was NZ$10.9 billion and

this significantly contributed to the current account deficit of NZ$9.5 billion.

This compared with current account deficit of NZ$7.1 billion in the year to June

2017.

     In seasonally adjusted terms, the current account recorded a deficit of

NZ$2.7 billion which was narrower than NZ$3.2 billion deficit in Q1 but wider

than NZ$1.6 billion in the same quarter last year.

     From Balance of payments data for the second quarter released by Statistics

New Zealand on Wednesday:

                                             Q2           Q1

------------------------------------------------------------

Current Account Balance (SA)        -NZ$2.7 Bln  -NZ$3.2 Bln

Current Account Balance (nominal)  -NZD$1.7 Bln   +NZ$88 Mln

Annual Deficit, % of GDP                   3.3%         2.7%

MNI Median Deficit                         2.9%

Annual Current Acct Balance            -9.5 Bln     -8.5 Bln

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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