1 Jun 2011

Terms of trade rise

5:18 pm on 1 June 2011

Higher dairy and meat export prices have lifted the country's purchasing power against the rest of the world to a 37-year high.

The country's terms of trade rose 0.9% in the first three months of the year as export prices rose more than import prices, Statistics New Zealand says.

A rise in the terms of trade means a larger volume of imports can be purchased for every dollar of exports sold.

Export prices rose more than 6%, reflecting higher prices for meat, dairy, forestry and wool. Volumes fell back slightly but remain near historic highs.

Higher fuel costs pushed up import prices. Volumes rose for the seventh consecutive quarter, though remain below levels before the recession.

On an annual basis, the terms of trade rose 6.8%.