An economist believes drought will start to affect exports in the next few months which could have a negative impact on economic growth this year.
Official figures recorded a bigger than expected $718 million trade surplus in March, due to an increase in exports.
However the impact of the drought is starting to show up, with meat exports up 11% in March, and dairy down 17%.
BNZ economist Doug Steel believes export volumes will fall almost 3% this quarter as the numbers of livestock sent to slaughter due to the drought decrease and milk volumes continue to drop.
Lower volumes may be offset by rising prices, particularly for dairy, and this will have a positive effect on the current account, he says, but the effect overall will still be to depress gross domestic product (GDP) growth.
