New Zealand's current account deficit may fall towards 5 per cent of gross domestic product over the coming year before starting to widen again as imports increase, according to the Treasury Department.
The deficit is also likely to start widening from late next year as a rising currency curbs exports, the department says on its website. The report does not contain forecasts.
New Zealand's current account deficit, the broadest measure of trade because it includes investments and tourism, narrowed to 5.9 per cent of GDP in the year ended June 30.
The currency has surged 22 per cent against the United States dollar in the past six months, damping prospects that exports will lead a recovery.
"The latest result means annual deficits will fall towards 5 per cent in the coming year but a larger, more sustained fall is unlikely," the Treasury said in yesterday's report.
The deficit was 8.9 per cent in the 12 months ending on December 31 last year.
- BLOOMBERG
Deficit likely to narrow
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