26 Feb 2010

Slump in imports cause trade surplus

7:05 pm on 26 February 2010

Statistics New Zealand says a trade surplus recorded last month was the highest for January in 21 years.

But the result was due to a continuing slump in imports rather than a surge in exports.

Economists had been expecting a deficit of $100 million. Instead, a surplus of $269 million was recorded, due to a big fall in imports.

Exports fell slightly also, with 24 out of the 40 export industries recording falls.

But sales to New Zealand's largest export market - Australia - bucked the trend, jumping 15% in January.

Exports to China, Indonesia, India and Singapore also continued to rise strongly. However, exports to North America, Europe and Japan all fell, as their economies continue to languish.

TD Securities Singapore-based economist Annette Beacher says New Zealand's economy is well-placed and will continue to benefit from exposure to the world's two-fastest growing economies - China and Australia.

The New Zealand dollar overnight hit a nine month low of 77.5 cents against the Australian currency overnight.

This was due to expectations that Australia's Reserve Bank will announce a further rise in interest rates next week. The rate is currently 3.75%.