KEY POINTS:
New Zealand posted a $433 million trade deficit in December, Statistics New Zealand said today.
The deficit, boosting the annual deficit to $6.16 billion from $6.03 billion in 2005, was better than economists' median forecast of a $500m deficit.
SNZ said seasonally adjusted values for the December quarter showed exports fell from the September quarter.
Paired with a small rise in imports, this drop in exports has increased the quarterly trade deficit to $1.7 billion from $1.3 in the September quarter.
The seasonally adjusted drop in exports followed four consecutive quarters of growth, while the increase in imports was the ninth consecutive quarter of growth.
The decrease in exports was led by milk powder, butter and cheese; the increase in imports was led by mobile phones and wind-powered generators.
Record dairy exports during the middle of 2006 pushed total seasonally adjusted exports up during those two quarters. Although dairy exports in the December 2006 quarter are still higher than a year before, they have decreased from the mid-2006 record levels.
This was the main cause of the drop in exports.
Actual values for the month of December 2006 showed both exports and imports up on the previous December (9.3 and 12.4 per cent, respectively). Exports were boosted by increases in meat and edible offal, milk powder, butter and cheese, and wine.
The rise in imports was led by increases in oil and petrol and mechanical machinery and equipment (particularly cranes).
Westpac economist Dominick Stephens said imports were strong on the back of strong consumer demand and the higher currency.
"Exports (were) also fairly strong relative to a year ago, which is due to reasonably strong production, but we do expect exports to decline over the next few months on the back of a higher dollar."
- NZPA
