- Andrew Hoggard, Federated Farmers dairy chairman
New Zealand's current account balance returned back to deficit in the second quarter as exports of forestry and meat declined, while imports of petroleum rose. The current account shortfall for the three months through June came in NZ$1.2 billion, following a revised surplus of NZ$821 million in the first quarter, Statistics New Zealand said. Economists, however, had expected a slightly bigger deficit of NZ$1.47 billion. For the 12 months to June 30, the current account deficit was NZ$8.3 billion, or 3.5% of GDP, climbing from 3.4% of GDP in the first quarter. Westpac predicts an annual gap to widen to 5.7% of GDP in the coming year, due to weak global dairy prices, which are estimated to wipe several billion from export incomes this year. Meanwhile, dairy prices unexpectedly soared 16.5% at the GlobalDairyTrade auction overnight, pushing the index to NZ$4037 a tonne. A third straight rise after months of declines is positive news to struggling dairy farmers, with further increases in sight as production weakens.
At the same time, New Zealand's net external debt position, the difference between overseas lending and borrowing, rose to NZ$138.2 billion in the third quarter, equivalent to 57.5% of GDP.
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