Oil sends June trade deficit over half billion dollars

Soaring oil prices sent the trade deficit in June to $522 million, Statistics New Zealand said today.

With more recent oil price hikes yet to show in the statistics, the figures are likely to get significantly worse yet.

It continues the pattern of worse-than-expected data -- economists had forecast a $442m deficit.

The annual deficit in the June year of $5.176 billion was the worst on record in nominal terms.

It compared with the previous worst in the May year of $5.047 billion and with the June 2004 year deficit of $3.514 billion.

Import costs rose to $3.08 billion from $3.02 billion in May with the cost of oil a large factor.

However, imports were slightly down on the $3.089 billion in June 2004.

Exports fell 5.1 per cent from June 2004 to $2.558 billion.

The trade deficit equated to 20.2 per cent of exports and the last time such a large deficit ratio was posted in June was in the mid-1970s.

SNZ said imports of "intermediate" goods rose 4.6 per cent in June mainly due to a 65 per cent increase in the cost of crude oil imports.

Imports of consumption goods increased 3.7 per cent with the main contributor being non-durable consumer goods.

Capital transport equipment imports, which excludes cars, also increased in the quarter but were offset by lower imports of capital machinery and plant.

In seasonally adjusted terms, exports fell 1.1 per cent in the June quarter.

Meat, particularly lamb, was the main contributor to the decrease. Caseinates, skimmed milk powder and butter exports also fell in the quarter.

- NZPA