Annual current account deficit $30.6 billion

New Zealand's annual current account deficit was $30.6 billion, 7.6 percent of gross domestic product (GDP), in the year ended 30 September 2023, according to figures released by Stats NZ today.

The deficit was $0.6 billion narrower than the $31.1 billion deficit in the year ended 30 September 2022 (8.3 percent of GDP).

The narrowing annual current account deficit in the year ended 30 September 2023 was due to a $4.1 billion narrowing of the services deficit, offset by a $2.5 billion widening of the goods deficit and a $1.4 billion widening of the primary income deficit.

Services exports drive the narrowing services deficit

In the year ended 30 September 2023, services exports increased $9.3 billion to $24.9 billion. Travel exports (that is, the spending by overseas visitors in New Zealand) increased $6.7 billion to $11.1 billion.

Overseas visitor arrivals have continued to rise since the easing of border restrictions.

International travel: September 2023 showed that overseas visitor arrivals rose from 690,000 to 2,770,000 in the year ended 30 September 2023.

"More overseas visitors to New Zealand in the year ended September 2023 meant an increase in tourism spending, but levels are still below what they were before COVID-19," general manager of economic and environment insights Jason Attewell said.

"While not as large, spending by New Zealanders on overseas travel has returned to previous levels."

In the year ended 30 September 2023, services imports increased $5.2 billion to $30.1 billion. Travel imports (that is, the spending by New Zealanders overseas) increased $3.1 billion to $6.2 billion.

Goods imports contribute to the widening goods deficit

In the year ended 30 September 2023, goods imports increased $2.4 billion to $84.1 billion while goods exports decreased $0.1 billion to $70.9 billion.

The largest contributor to the increase in goods imports was non-crude fuel imports (including diesel, jet fuel, and petrol), which increased $3.5 billion (52 percent).

Meat exports, largely sheep meat and beef, decreased $1.2 billion (12 percent). This was partly offset by a $0.5 billion (3 percent) increase in dairy exports.

The New Zealand international trade dashboard shows exports and imports data for goods and services by commodity type.

Primary income deficit continues to widen

In the year ended 30 September 2023, the primary income deficit widened by $1.4 billion to $12.3 billion, showing overseas investors earned more from their investments in New Zealand than New Zealand investors earned from their investments overseas.

Income earned by overseas investors increased $3.4 billion in the year ended 30 September 2023, while income earned by New Zealand investors from overseas increased $2.1 billion.

Interest payments increased $4.1 billion to $11.7 billion in the year ended 30 September 2023. Over the same period, interest income increased $1.3 billion to $6.6 billion.

"In the September 2023 year, the rise in interest payments to overseas investors was more than double the rise in interest received from overseas," Attewell said.

"This reflects the structure of the New Zealand economy where our liabilities to the rest of the world are greater than our assets."

Quarterly seasonally adjusted current account deficit widens

In the September 2023 quarter, the seasonally adjusted current account deficit widened $0.4 billion to $7.4 billion. Without seasonal adjustment, the actual current account deficit widened $6.8 billion to $11.5 billion.

Seasonally adjusted series are subject to data updates due to changes in seasonal patterns since COVID-19 impacts first started. For example, changes to border restrictions led to movements in the data that are different from the long-term seasonal pattern for travel services.

Net international liability position

The net international position represents the difference between New Zealand's financial assets and liabilities with the rest of the world. New Zealand has a net liability position as we have more liabilities with the rest of the world than we do assets.

At 30 September 2023, New Zealand's net international liability position was $191.9 billion (47.9 percent of GDP), $1.7 billion narrower than $193.7 billion as at 30 June 2023.

At 30 September 2023, New Zealand international assets increased $1.0 billion, while liabilities decreased $0.8 billion, compared with 30 June 2023. The increase in assets was driven by a $6.7 billion increase in reserve assets, reflecting Reserve Bank of New Zealand's policy intervention to purchase additional foreign currency reserves. See Building a balance sheet to support financial stability for more information. This increase was offset by a $6.7 billion reduction in the value of portfolio investment, primarily due to a falling share market over the quarter.