KEY POINTS:
New Zealand's trade accounts sank deeper into the red last month.
Imports exceeded exports by $1.18 billion, the largest monthly deficit for nearly three years.
It pushed the annual deficit, which had been improving, up to just under $5 billion.
Exports at $3.2 billion were up 8 per cent on September last year, with notable increases in oil, steel and fruit. Dairy exports were lower than a year ago, but for the September quarter as a whole were 31 per cent higher than in the same period last year.
Imports, by contrast, at $4.4 billion were a hefty 24 per cent higher than in September last year, and were not boosted by "lumpy" items like aircraft.
Just over a third of the increase came from oil and oil products, and fertiliser. Crude oil imports were up 21 per cent in September, compared with September 2007, but for the September quarter the increase was 70 per cent. World oil prices peaked in July, and have more than halved since then.
Goldman Sachs JBWere economist Shamubeel Eaqub said the outlook for economic growth in New Zealand's main export destinations had deteriorated. Goldman Sachs expects them to grow by just 1.8 per cent next year, down from 2.5 per cent this year.
"While [export] volumes have not shown any noticeable pullback as yet, some commodity prices have already reversed some of their recent impressive gains," he said.
Deutsche Bank chief economist Darren Gibbs said that after yesterday's surprise - the trade deficit was twice what the market was expecting - the broader current account deficit was likely have widened to nearly 9 per cent of gross domestic product in the September quarter, levels last seen in 2006. It was 8.4 per cent in June.
But he said sharply lower domestic demand - especially for import-intensive capital expenditure - should see the deficit narrow again next year, helped by the lower exchange rate.
