NZ posts worst October trade deficit since 1989

3.00pm

A $701 million trade deficit posted in October is the worst October shortfall for New Zealand since 1989.

Statistics New Zealand (SNZ) today said trade deficits had always been recorded in October months, but at 32 per cent of exports today's October figure was the highest for 14 years. It comes hard on the heels of the $721 million September trade deficit, the worst ever since statistics began in 1960.

SNZ said current economic bogeyman, the rampant local currency, had affected the figure.

The provisional value of imports for October was $3.02 billion, 4.7 per cent lower than the same month last year, while the estimated value of merchandise exports for October was $2.32 million.

SNZ said the underlying trend for the value of merchandise imports had been relatively flat since the second half of 2000.

"Over the same period, the New Zealand dollar, as measured by trade weighted index, has generally appreciated against all our major trading partners, exerting a downward influence on import prices."

The main contributors to lower import values during October compared to the same month last year were petroleum and petroleum products, aircraft and vehicles. These were partly offset by higher values for pharmaceutical products, and optical, medical and measuring equipment.

SNZ said the main contributors to the lower import value for petroleum and petroleum products were motor spirit, diesel and crude oil. The lower value for crude oil was mainly due to differences in price when expressed in New Zealand dollars, with quantities recording little change.

Lower import values for aircraft were a result of three large aircraft being imported during October 2003, compared with six in October 2002.

Lower numbers of new cars between 1500cc and 3000cc were the main contributor to the lower import values of vehicles. Used cars showed little change in both count and value.

- NZPA