New Zealand's trade surplus narrowed in May, as expected, as imports rose faster than exports, widening the annual deficit.
The monthly surplus was $301 million last month, down from a revised $335 million in April, according to Statistics New Zealand. That's in line with the $300 million surplus forecast in a Reuters survey. The annual gap widened to $810 million from $790 million.
The value of the nation's biggest exports, dairy and meat, have declined in line with weaker global prices for farm commodities. Exports fell to $4.42 billion in May from $4.62 billion in the same month last year, while imports rose to $4.11 billion from $4.07 billion.
"This trade balance deterioration is the driving force behind our expectation for a further widening in NZ's current account deficit, with it forecast to reach 6 per cent of GDP by the end of the year," said Philip Borkin, economist at Goldman Sachs.
Meat exports showed the biggest decline, falling 13 per cent from a year earlier. Milk powder, butter and cheese declined 6.2 per cent and forest products declined 19 per cent. Crude oil exports fell 20 per cent.
