The impact of falling dairy export receipts was a primary contributor to the balance of payments deficit on current account pushing out to $2.5 billion in the three months to September 30, the highest since the December 2008 quarter, according to Statistics New Zealand.
On an annual basis, the current account deficit weighed in at $6.1 billion, or 2.6 per cent of gross domestic product, still low by historical standards but consistent with expectations that the balance between what New Zealand receives from the rest of the world versus what it brings in will deteriorate over the next five years.
Yesterday's half year economic and fiscal update from the Treasury forecasts the current account deficit will peak at 6.2 per cent of GDP in March 2016, before falling back to 5.9 per cent of GDP by March 2019. The current account deficit oscillated between 6 and 8 per cent of GDP in the latter half of the 2000s before falling dramatically after the global financial crisis in 2008.
The value of exported goods fell by $380 million in the September quarter, compared with the June quarter, while imports rose by $325 million, reflecting the lumpy impact of aircraft imports and higher holdings of offshore oil stocks by New Zealand companies.
"With the value of goods exports falling and imports rising, the current account deficit is now the largest it has been in nearly six years," Statistics NZ said in its statement.