Trade deficit hits all-time high

New Zealand's trade deficit for May was an all-time high for the month at $104 million, even as exports hit the highest figure for any month, data published today by Statistics New Zealand (SNZ) showed.

Imports and exports both showed large increases in May, up 24.3 per cent and 24 per cent respectively, compared to May 2005.

Imports were valued at $3.75 billion, with most of the $735 million increase on May 2005 coming from petroleum, diesel and crude and aircraft, SNZ said.

Aircraft were also a large contributor to exports which reached an all-time monthly high of $3.65b.

The figures, which took the annual trade deficit for the year to May to $6.91b, were well outside the expectations of many economists.

The median monthly balance in a Reuters poll had been $23m with the annual deficit median $6.8b.

SNZ said it was only the third time in the past 20 years that May recorded a deficit, with the average trade balance for the month over the past decade being a surplus of $274m.

The annual deficit was equivalent to 21.6 per cent of exports, the highest percentage for a May year since 1976. The average balance for a May year during the past decade was a deficit equal to 8 per cent of exports.

The May deficit came after monthly surpluses of $38 million and $70 million in April and March.

Imports of petroleum and products were up $281m last month compared to May 2005, with diesel up $126m and crude up $73m. Aircraft and parts were up $208m, SNZ said.

With exports, the value of milk powder, butter and cheese was up 44.4 per cent, or $213m, in May compared to same month in 2005.

Within that category the largest increases were for whole milk powder, up $83m, and butter up $54m, or 153.3 per cent.

The total export value for milk powder, butter and cheese at $692m was the highest ever for May and just short of the highest monthly value ever recorded -- $700m in October 2001.

- NZPA