15 Dec 2021

New Zealand's balance of payment deficits reach record high

1:35 pm on 15 December 2021

The country has reached its largest ever balance of payments deficit since records began in the 1970s, due to ongoing import growth.

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Photo: 123rf

The deficit is a broad measure of the country's transactions with the rest of the world in terms of how much it borrows, verus how much it earns.

It had grown to $4.8 billion in the September quarter, putting the annual deficit at $15.9bn, or 4.6 percent of GDP.

The current deficit surpassed the previous record from December 2008, when it reached $14.7bn or 7.8 percent of GDP due to the effects caused by the global financial crisis.

In the September quarter, the seasonally adjusted value of goods that were imported rose by $1.8bn to $18.1bn, which was a new record for the series.

"Imports of fertilisers, crude oil, and vaccines were the main drivers of the overall rise in goods imports this quarter," Stats NZ institutional sectors senior manager Paul Pascoe said.

The value of goods exported rose more modestly, increasing $209 million to $16.2bn.

"While the value of goods exports is back above levels seen prior to Covid-19, it has grown more slowly than imports in the last year," Pascoe said.

The value of services that were imported from overseas also rose, while services exported fell, largely due to the suspension of the trans-Tasman travel bubble.

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