A leading economist says it's inevitable that New Zealand's current-account deficit will keep widening.
Official figures show the deficit - the broadest measure of the country's dealings with the rest of the world - totalled $7.5 billion in the year to June, or 3.7% of GDP.
For the three months to June, Statistics New Zealand figures show that the seasonally adjusted deficit was $2 billion - $500 million more than in the previous quarter.
A major factor has been the outflow of higher profits earned in New Zealand by foreign-owned companies, and ANZ's head of market economics, Khoon Goh, says that trend will continue as the economy improves.
Another factor, he says, is that next year there's going to be a lot of demand for imported construction materials required for the rebuilding of Christchurch.
Mr Goh warns, however, that international agencies won't allow New Zealand to run large current-account deficits for too long before downgrading the country's credit rating. Anything over 5.5% of GDP would make them uncomfortable, he says.
He says the country still owes a lot of money to foreigners compared to other countries.
More than doubled in 15 months
The annual current-account deficit has more than doubled in 15 months.
In the year to March 2010 it stood at $3.5 billion, as local profits paid to foreigners slumped and New Zealanders bought fewer goods from overseas.
But Statistics New Zealand says the profit recovery coupled with rising imports has pushed the deficit up in every quarter since.
Higher commodity prices helped the goods side of the ledger, while weaker tourist numbers due to earthquakes and the high New Zealand dollar dragged down income from services.
