19 Jun 2013

Quarterly current account deficit down

7:10 pm on 19 June 2013

The quarterly current account deficit has narrowed.

Official figures from Statistics New Zealand show the seasonally adjusted current account deficit fell to $2.2 billion in the three months to March, compared with $2.5 billion in the previous quarter.

Radio New Zealand's economics correspondent said the quarterly deficit improved, due to farmers selling more dairy product overseas and receiving better prices, mainly because of the effects of the drought, while tourists also spent more.

The investment income deficit remained flat, with a fall in income earned by foreign investors partly offset by lower profits earned by New Zealand firms' overseas.

On an annual basis, the deficit narrowed to $10.1 billion, or 4.8% of gross domestic product, because of a fall in fuel imports.

The deficit is expected to widen over the next couple of years due to the Canterbury rebuild generating demand for imports, and profits of foreign-owned domestic companies rising in line with stronger economic growth.