"The economy is doing extremely well. We see it in the regions, we see it in the numbers. We're feeling very, very confident."
- Shamubeel Eaqub, NZIER principal economist
What kind of a proof the Reserve Bank of New Zealand is looking for in order to claim the economy is on the track to prosperity? Another set of data released this week supported the case on March 12 New Zealand is poised to become the first developed country to start raising interest rates.
On the back of record payments to the nation's dairy farmers and a strong demand from China, New Zealand logged its highest ever trade surplus in January. In its monthly report Statistics New Zealand said the nation's trade surplus propelled to $306 million last month from $493 million a month earlier. A report also showed the surplus was measured at 7.5% of exports– the highest level ever for a January month. Moreover, the figure surprised markets to the upside as markets expected a surplus of $230 million. Even though the country exported slightly less over the observed period that it did in the prior month, imports also fell. Almost 30% or $1.2 billion of Kiwi exports went to the world's second largest economy, which was mostly boosted by a $469 million jump in milk-powder shipments. This is definitely a positive sign for New Zealand, as it is highly dependent on demand from China.
Following a release of the data the kiwi soared, hitting 0.8331 and keeping in mind approaching RBNZ meeting, the kiwi is only projected to rise over the foreseeable future.
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