KEY POINTS:
The overseas trade deficit narrowed to $187 million last month, the smallest for any January since 2001.
New Zealand pulled in $1.06 of imports for every $1 of exports, compared with $1.09 in December, $1.16 in November and $1.26 in October.
Exports were 3 per cent higher than in January last year, while imports were 0.9 per cent lower.
But the kiwi dollar depreciated by 23 per cent over the same period.
"Excluding currency effects, import growth has collapsed," Goldman Sachs JBWere economist Shamubeel Eaqub said.
"At face value, the data represent a weak start to 2009. Not only is the entrenched domestic recession deepening, the global recession looks also to be weighing on exports.
"This noxious mix is likely to damage economic and employment prospects at least through the first half of 2009."
Last month's increase in exports was led by cereal products, casein and meat, offset by a sharp drop in crude oil exports (down $219 million) as 300,000 barrels from the Tui field were processed domestically rather than exported.
While the trend for export receipts has been rising steadily over the past year, the trend for imports appear to have reached a turning point, having fallen 2.3 per cent since September, Statistics New Zealand says.
Last month, imports of consumer goods and intermediate goods (components and materials) were up but capital goods imports (including transport equipment) were down and imports of cars were the lowest for 10 years. On an annual basis, the deficit was $5.5 billion, down from $5.6 billion in December but higher than in November or October.
"The underlying trend in the trade deficit is a widening," Eaqub said.
This might be only a temporary phenomenon related to the falling dollar - where a falling exchange rate pushes the deficit up until higher import prices curb demand and export receipts rise.
But a more sinister development could be deteriorating terms of trade (a measure of relative prices or the kinds of thing the country exports and the things it imports), exposing a large real or volume trade deficit, he said.
That would increase the need to import capital at at time when it is less willingly extended.
