Trade Deficit Deteriorates Further As Imports Soar

The NZ trade deficit widened sharply in March to $12.73bn from $7.96bn, this left the YTD value at $16.4bn from $15.7bn.

• The Q1 seasonally adjusted trade deficit widened $354mn from Q4. This data only includes goods and with the return of tourism services exports are likely to have improved, but it is suggesting that the Q1 current account deficit is unlikely to improve significantly from Q4’s 8.9% of GDP, the highest in the OECD. Q1 exports fell 2.7% q/q and imports were little changed.
• The deterioration in the goods trade position was driven by stronger imports. Imports rose 10.2% y/y, driven by soaring petroleum and products, while exports rose only 0.6% y/y. The weak export result was due to a drop in milk powder, butter and cheese, the largest export group, and also meat.
• Exports to China fell 5.7% y/y% driven by lower milk product and wood shipments. But exports to Australia rose 30.2% y/y and to the US 4.1% y/y. Japan fell 9.6% y/y. Imports from the US rose 39% y/y but fell 13% from China.

Source: MNI - Market News/Refinitiv