NZ Current Account Gap Grows
December 22, 2011 New Zealand Taxation
New Zealand’s current account deficit has continued to expand, as price for the country’s export commodities fall.
On December 21st Statistics New Zealand released its quarterly report on the country’s import and export levels, showing that the national current account deficit was larger than expected.
During the September quarter of 2011 the current account deficit in New Zealand reached NZD 2.7 billion, which exceeded the deficit recorded in the June 2011 quarter by NZD 0.7 billion. New Zealand’s total export of goods was valued at NZD 111.7 billion during the latest quarter.
The increased current account deficit was attributed to falling prices of New Zealand’s primary export commodities, especially meat, dairy and forestry products. The decreasing commodity prices caused a NZD 0.6 fall in export values.
Nearly NZD 0.4 billion of the deficit was attributed to increased levels of earnings seen by foreign investors for their business in New Zealand. According to Statistics New Zealand, a significant portion of the increased earnings was seen by profits made by foreign banks operating in New Zealand.
The Rugby World Cup was reported as having a significant positive impact on the current account deficit, contributing approximately NZD 0.2 billion to export of services during the September quarter.
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