Second largest trade deficit on record in September

1.00pm

The trade deficit for September was $1.02 billion, or 47.4 per cent of exports, and the second largest on record, Statistics New Zealand said today.

The deficit ranked just behind that of December 1999 in terms of nominal dollar value, Statistics NZ said.

In December 1999, the import of frigate HMNZS Te Mana contributed $631 million to the $1.062 billion deficit.

The average trade balance for September months during the past decade was a deficit equating to 17.1 per cent of exports.

On an annual basis, the deficit of $4.087 billion for the September 2004 year was the largest on record, Statistics NZ said in a statement.

Economists polled by Reuters expected a median deficit of $691 million for September, and a $3.77 billion deficit for the year to September 30.

Statistics NZ said trend estimates indicate the trade deficit has been widening since December 2003.

The bigger than usual trade deficit in September contributed to a quarterly trade deficit of $2.109 billion.

The provisional value of merchandise imports for September was $3.17 billion, up $216 million, or 7.3 per cent, compared with the same month in 2003.

Intermediate goods and capital goods were the main contributors.

The estimated value of merchandise exports for September was $2.15 billion, down $51 million, or 2.3 per cent, on those in September 2003.

It appeared the main contributor to the lower value of exports was dairy products, Statistics NZ said.

Deficits are normal for September, with the main agricultural production period only just getting under way and importers buying goods for Christmas.

On a trade-weighted basis, the New Zealand dollar was 0.9 per cent higher than August, and 7.9 per cent higher than a year earlier.

- NZPA