July merchandise trade deficit estimated at $373m

The estimated merchandise trade balance for July 2004 is a deficit of $373 million, or 15 per cent of exports, Statistics New Zealand said today.

While a trade deficit for the month of July was usual, the average balance for the past decade was 10.5 per cent of exports, Statistics NZ said in a statement.

Economists had expected a deficit $444m.

The provisional value of merchandise imports was $2.86 billion, which was 2.8 per cent up on the same month in 2003.

The main contributors to the higher value of imports in July were mechanical and electrical machinery and equipment, motor spirit, partly refined petroleum and diesel.

"Partly offsetting these higher values, were lower values of imported aircraft and ships," Statistics NZ said.

The estimated value of merchandise exports for July was $2.4b, up 8.2 per cent on the same month last year.

Meanwhile, the trend for the value of merchandise imports had risen 11.1 per cent since July 2003.

The value of the New Zealand dollar, as measured by the trade-weighted index, had appreciated 4.5 per cent in the year to July 30. It peaked against the US dollar in February.

"An appreciating exchange rate generally has a downward influence on import prices, which may lead to an increase in the quantity of items imported," Statistics NZ said.

- NZPA