- Jason Attewell at Statistics New Zealand
New Zealand unexpectedly logged a trade surplus in May, as imports fell by more than exports. The country recorded a NZ$350 million trade surplus in the reported month, far surpassing economists' predictions for a NZ$100 million deficit and compared with the revised NZ$183 million surplus in April. Exports dropped 4.7% year-on-year in the reported month to NZ$4.36 billion, whereas imports plunged 7% to NZ$4.01 billion. The decrease in exports was driven by dairy once again, reflecting a steep drop in global dairy prices since early 2014 and a decline in demand from the world's second biggest economy, China, and increased global supply. Outbound shipments destined for China plummeted more than 22% on year in May, led by whole-milk powder. Yet, such a sharp decline was offset by an increase in exports to the US. The drop in imports was largely caused by crude oil, which plunged 43% compared to May 2014. Nevertheless, the annual balance remained in deficit, recording a NZ$2.57 billion shortfall for the year ended May 31, according to Statistics New Zealand.
Meanwhile, the Reserve Bank of New Zealand continues to be unsatisfied with New Zealand Dollar' strength, saying that the local Dollar persists at an unsustainable level. The comments came despite the Kiwi Dollar sliding to the lowest level in five years versus the US Dollar.
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