Good news and bad news in January trade deficit

12.15pm

New Zealand's January trade deficit was today updated to $550 million, lower than the $571 million initially reported last month, but still well above economists' original forecasts of about $416 million.

The revised figure remains New Zealand's worst ever January trade deficit when expressed as a percentage of exports since 1986 Statistics New Zealand (SNZ) said.

The January trade deficit was revised downward due to an upward revision in the value of exports for the month to $2.04 billion from the $2.02 billion previously reported.

SNZ said the main contributors to the upward revision of export values were frozen beef, racehorses, dairy products, wine, and ships and boats.

SNZ said the updated provisional value of exports for January 2004 was virtually unchanged from the January 2003 figure.

Over the same period the New Zealand dollar has appreciated by 11 per cent on a trade weighted basis, suggesting volumes of exports have risen substantially. SNZ releases separate figures on export volumes on Friday and wasn't prepared to comment on this today.

While SNZ said "the underlying trend for the value of merchandise exports has increased 3.0 per cent since August 2003", exports for January were down on the $2.27 billion in December 2003 and $2.38 billion in November 2003.

The January 2004 import figure remained unchanged at $2.60 billion.

"While the exports trend is rising, the imports trend is rising at a faster rate, causing the trade deficit to widen," SNZ said.

In the year to January 2004, the updated value of exports was $28.36 billion, down 7.9 per cent on the same period the previous year.

The revised figure gives an annual trade deficit to January of $3.62 billion, or 12.7 per cent of exports.

- NZPA