16 Sep 2015

Current account deficit widens as commodity slide hits exports

1:45 pm on 16 September 2015

New Zealand's balance of payments - which broadly measures the country's ability to pay its way in the world - has worsened slightly in the three months to June.

Official figures show an actual deficit of $1.22 billion for the quarter, as a slide in commodity prices - dairy, meat and forestry - hit export earnings, while a maintenance shutdown for the Marsden point oil refinery led to a rise in oil imports.

However, the record numbers of tourists have boosted the service sector earnings.

For the 12 months to June the deficit widened to $8.3 billion or 3.5 percent of the value of the economy, which compares with a 3.4 percent deficit in the year to March.

The net liabilities position - the difference between what the country earns from its investments overseas and what foreign investors earn here or are owed - has improved slightly and stood at just under $150 billion, or about 62 percent of GDP, and the external debt level is at its lowest in nearly 15 years.

Looking ahead, the deficit is expected to widen further with some forecasts that will head towards 6 percent of gross domestic product in the next few years.