September 03, 2024 05:00 GMT
Terms Of Trade Recovering But Export Volumes Fall In Q2
NEW ZEALAND
NZ saw the second consecutive quarterly improvement in its merchandise terms of trade in Q2. It rose 2.1% q/q to be down 1.7% y/y after a trough of -10.7% y/y in Q4 2023, but there was a sharp deterioration in the services terms of trade of 8.6% q/q and 5.7% y/y. Net exports of goods are likely to weigh on Q2 GDP.
- Goods export prices rose 5.2% q/q driven by an 8% q/q rise in dairy, which is now up 0.3% y/y, the first positive in over a year. Import prices also rose but by less posting a 3.1% q/q increase to be up 0.7% y/y.
- Imported consumer inflation picked up again rising 1.4% q/q to 4% y/y up from 3.3% y/y in Q1 and the recent trough of 2.4% y/y in Q4 2023. While the disinflationary impact from goods prices seems to be past, price increases are still low compared to most of the post-Covid period.
- The services terms of trade fell 8.6% q/q and -5.7% y/y in Q2 due to services import prices rising 6.2% q/q but export prices falling 2.9% q/q.
- NZ Q2 GDP prints on September 19. So far it is looking weak with Q2 retail sales volumes down 1.2% q/q and Q2 merchandise export volumes decreasing 4.3% q/q while imports rose 3.1% q/q signalling a negative contribution from net exports of goods. We don’t have services yet. The RBNZ is forecasting a 0.5% q/q contraction in GDP.
NZ terms of trade y/y%
Source: MNI - Market News/Refinitiv
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