23 Mar 2011

Current account deficit at $2.8b

2:22 pm on 23 March 2011

New Zealand's current account deficit was $2.8 billion in the final three months of last year, Statistics New Zealand figures say.

The deficit, which represents the gap between what the country paid out overseas and what it earned, is a turnaround from a $1.7 billion surplus in the previous three month period.

The deficit was due mainly to imports rising faster than exports and an increase in income earned by overseas investors on investments in New Zealand

Excluding reinsurance claims from the September quarter, the deficit widened by $990 million.

On an annual basis, the current account deficit stood at $4.4 billion dollars, or 2.3% of gross domestic product, the lowest in nearly a decade.

Expected reinsurance payments to local insurers of $3.6 billion following the Canterbury earthquake resulted in a surplus in the previous three months.

But Statistics New Zealand says no reinsurance was counted in the December quarter due to difficulties distinguishing between damage caused by the 4 September earthquake and Boxing Day aftershock.