Shortfall balloons to $267m

By BRIAN FALLOW economics editor

New Zealand had its worst monthly trade deficit for a year last month as export growth stalled.

The deficit of $267 million was far worse than the $30 million analysts expected.

But even with this deficit, the annual figure is a surplus of $796 million, compared with a deficit of $2.9 billion the year before.

The annual deficit has been improving all year as New Zealand benefits from high commodity prices, a weak exchange rate and good growing conditions.

Export figures will not be finalised until December 12, but Statistics New Zealand estimates exports last month were only 0.2 per cent higher than in October last year. For nearly two years until September, exports had been posting double-digit annual growth.

Imports last month at $3.01 billion were 2.9 per cent higher than in October last year, even though the dollar has appreciated 4.9 per cent since its trough a year ago.

But imports for the three months ended October were 3 per cent lower than in the same period last year.

Deutsche Bank economist Darren Gibbs said that while that was partly due to lower crude oil prices, the weak level of imports despite continuing economic growth reflected the weak dollar.

Bank of New Zealand economist Stephen Toplis was concerned that imports of capital goods last month were down 12.6 per cent on October last year. He expected investment in the next 12 months to be subdued because of business uncertainty.