KEY POINTS:
The trade gap narrowed last month, driven by sharp increases in exports of oil and dairy products.
The monthly deficit was $223 million, lower than market expectations, and meant the country imported $1.06 worth of goods for every $1 of exports.
Exports were up 30.9 per cent on June last year, most of the increase ($490 million out of $846 million) explained by higher dairy exports and oil from the new Tui field.
But monthly data can be blown around by the timing of shipments and by "lumpy" one-off imports, like the frigate HMNZS Canterbury in June last year.
Comparing the June quarter as a whole with the same period last year, exports were 20.5 per cent higher, buoyed by high dairy prices and the flows from Tui, while imports were 18.6 per cent higher driven by capital goods, crude oil and intermediate goods (raw materials and components).
In seasonally adjusted terms the June quarter deficit at $1.86 billion was $1 billion wider than in the March quarter and the largest since the March quarter 2006.
But Deutsche Bank chief economist Darren Gibbs said two-thirds ofthe growth in imports over theJune quarter could be attributed to oil-related capital expenditure in April and aircraft imports in May andJune.
ASB economist Jane Turner said the surprisingly strong result for June provided reassurance that a recovery in the trade balance was well under way.
