- Jason Attewell, Statistics NZ international statistics manager
New Zealand's current account deficit shrank in the beginning of the year amid lower oil prices and a decline in overseas spending. New Zealand posted a seasonally adjusted current account deficit of NZ$1.8 billion in the first quarter of 2015, Statistics New Zealand said. That follows the NZ$2.551 billion shortfall in the previous three months. The annual current account deficit widened to NZ$8.6 billion, or 3.6% of gross domestic product, as plunging dairy prices hit exports figures. Economists had predicted a quarterly surplus of NZ$240 million, for an annual deficit of NZ$9.01 billion, or 3.8% of GDP. The falling goods terms of trade, largely plunging dairy prices, is expected to see the annual deficit worsen to about 5% of GDP by the end of this year. Strong tourism to New Zealand and a large number of international students coming have helped lift the services sector and limit the current account deficit. The balance on services was in surplus by NZ$695 million in the March quarter, up NZ$68 million on the preceding quarter. That reflected the increase in travel services, with overseas visitors spending more.
The value of imports declined NZ$463 million in the quarter, reflecting the NZ$680 million drop in oil and fuel imports. The value of exports also fell in the quarter, down NZ$150 million due to a 6.3% fall in dairy prices. New Zealand's net foreign liabilities declined to 64.2% to GDP, or $153.5 billion, from 65% of GDP, or $154.6 billion, three months earlier. That was the lowest ratio since 2001.
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