Current account deficit widens to $5.0 billion

New Zealand’s seasonally adjusted current account deficit widened to $5.0 billion in the March 2021 quarter, Stats NZ said today.

Prior to the March 2021 quarter, the largest deficit reported was $4.3 billion in the June 2008 quarter during the global financial crisis.

The annual current account deficit was $7.2 billion in the year ended March 2021 (2.2 percent of GDP).

QuarterGoods and services balance (seasonally adjusted)Current account balance (seasonally adjusted)Primary and secondary income balance
Jun-00 429000000 -931000000-1361000000
Sep-00 622000000 -947000000-1569000000
Dec-00 1177000000 -622000000-1798000000
Mar-01 1288000000 -312000000-1600000000
Jun-01 1511000000 44000000-1467000000
Sep-01 1498000000 -99000000-1596000000
Dec-01 1026000000 -659000000-1685000000
Mar-02 450000000-1091000000-1540000000
Jun-02 1435000000 -306000000-1741000000
Sep-02 1006000000 -719000000-1724000000
Dec-02 791000000 -789000000-1581000000
Mar-03 915000000 -725000000-1639000000
Jun-03 729000000-1063000000-1792000000
Sep-03 794000000 -779000000-1573000000
Dec-03 593000000 -892000000-1484000000
Mar-04 410000000-1349000000-1759000000
Jun-04 768000000-1202000000-1970000000
Sep-04 3000000-2289000000-2292000000
Dec-04 -173000000-2144000000-1972000000
Mar-05 -156000000-2309000000-2153000000
Jun-05 -491000000-2871000000-2379000000
Sep-05 -650000000-3105000000-2454000000
Dec-05 -498000000-3092000000-2594000000
Mar-06 -721000000-3671000000-2950000000
Jun-06 -220000000-2718000000-2498000000
Sep-06 -29000000-2668000000-2639000000
Dec-06 -146000000-3010000000-2864000000
Mar-07 -273000000-3225000000-2952000000
Jun-07 -343000000-3282000000-2940000000
Sep-07 -34000000-3259000000-3226000000
Dec-07 501000000-2688000000-3189000000
Mar-08 78000000-3192000000-3270000000
Jun-08 -894000000-4262000000-3368000000
Sep-08 -618000000-3914000000-3296000000
Dec-08 131000000-3189000000-3321000000
Mar-09 1058000000-1941000000-2999000000
Jun-09 1046000000 -314000000-1360000000
Sep-09 1371000000 340000000-1030000000
Dec-09 786000000-2436000000-3222000000
Mar-10 1242000000 -491000000-1732000000
Jun-10 1678000000 -890000000-2568000000
Sep-10 1236000000 -980000000-2217000000
Dec-10 661000000-2157000000-2818000000
Mar-11 1036000000-1645000000-2681000000
Jun-11 1161000000-1250000000-2411000000
Sep-11 842000000-1718000000-2560000000
Dec-11 1328000000-1304000000-2632000000
Mar-12 -96000000-2493000000-2396000000
Jun-12 429000000-2233000000-2662000000
Sep-12 481000000-1773000000-2254000000
Dec-12 189000000-1977000000-2166000000
Mar-13 411000000-1967000000-2378000000
Jun-13 123000000-2148000000-2272000000
Sep-13 139000000-2065000000-2204000000
Dec-13 1721000000 -859000000-2580000000
Mar-14 1766000000 -791000000-2556000000
Jun-14 478000000-2166000000-2644000000
Sep-14 109000000-2268000000-2377000000
Dec-14 382000000-2280000000-2662000000
Mar-15 719000000-1710000000-2429000000
Jun-15 363000000-2110000000-2474000000
Sep-15 809000000-1325000000-2135000000
Dec-15 362000000-1806000000-2169000000
Mar-16 822000000-1138000000-1960000000
Jun-16 611000000-1401000000-2012000000
Sep-16 450000000-1861000000-2310000000
Dec-16 379000000-1513000000-1893000000
Mar-17 97000000-2619000000-2716000000
Jun-17 761000000-1736000000-2498000000
Sep-17 1176000000-1833000000-3009000000
Dec-17 683000000-2250000000-2933000000
Mar-18 -556000000-3398000000-2842000000
Jun-18 -153000000-3187000000-3034000000
Sep-18 -55000000-2808000000-2753000000
Dec-18 -388000000-3216000000-2827000000
Mar-19 -258000000-2864000000-2606000000
Jun-19 -64000000-2735000000-2672000000
Sep-19 -515000000-2819000000-2304000000
Dec-19 -254000000-2134000000-1880000000
Mar-20 574000000-1253000000-1827000000
Jun-20 2120000000 540000000-1580000000
Sep-20 1312000000 -506000000-1818000000
Dec-20 -607000000-2033000000-1425000000
Mar-21-3104000000-5022000000-1918000000

Rise in imported goods drives New Zealand into a goods deficit

For the first time since the March 2020 quarter, the value of imported goods was larger than the value of exported goods. This resulted in a goods deficit of $1.5 billion.

In the March 2021 quarter, seasonally adjusted goods imports rose by $1.3 billion, reaching $16.0 billion. A wide range of goods contributed to this rise with consumption goods being the largest contributor.

Meanwhile, seasonally adjusted goods exports fell by $251 million to $14.5 billion.

“The overall value of imported goods has recovered to pre-COVID-19 levels, but the value of exported goods has lagged behind. This is why we are seeing the current account deficit widen so significantly,” international statistics senior manager Darren Allan said.

QuarterGoods exports (seasonally adjusted)Goods imports (seasonally adjusted)Services exports (seasonally adjusted)Services imports (seasonally adjusted)
Jun-00 6907000000 684100000027460000002382000000
Sep-00 7548000000 719300000027840000002518000000
Dec-00 8367000000 761800000031250000002697000000
Mar-01 8126000000 734500000031690000002662000000
Jun-01 8349000000 734500000031290000002622000000
Sep-01 8370000000 747200000031330000002533000000
Dec-01 8014000000 748600000030700000002572000000
Mar-02 8010000000 837800000034520000002634000000
Jun-02 7970000000 732500000033990000002609000000
Sep-02 7762000000 767300000035020000002585000000
Dec-02 7422000000 766600000036200000002585000000
Mar-03 7368000000 739800000033880000002443000000
Jun-03 7150000000 741800000034230000002426000000
Sep-03 7208000000 741800000035660000002562000000
Dec-03 7164000000 760500000035730000002539000000
Mar-04 7551000000 806500000035270000002603000000
Jun-04 8142000000 847600000038340000002732000000
Sep-04 7475000000 827800000036200000002813000000
Dec-04 7776000000 859000000034980000002857000000
Mar-05 7789000000 854900000035520000002947000000
Jun-05 7804000000 880100000035000000002994000000
Sep-05 7722000000 920800000038310000002995000000
Dec-05 7950000000 902000000035660000002993000000
Mar-06 8024000000 935900000036930000003079000000
Jun-06 8850000000 974200000038170000003144000000
Sep-06 9296000000 989800000037280000003155000000
Dec-06 8574000000 952600000038920000003085000000
Mar-07 8820000000 987100000039220000003144000000
Jun-07 8677000000 972200000039030000003200000000
Sep-07 9025000000 979500000040350000003299000000
Dec-07104620000001056100000039880000003387000000
Mar-08104700000001102400000040650000003433000000
Jun-08105180000001191500000042510000003748000000
Sep-08112470000001217700000040360000003724000000
Dec-08115350000001165500000041040000003852000000
Mar-09108270000001030600000042250000003688000000
Jun-0910153000000 961500000039280000003420000000
Sep-09 9770000000 917100000041070000003336000000
Dec-09 9384000000 926100000039810000003318000000
Mar-1010565000000 979300000039020000003433000000
Jun-10112000000001009500000040560000003482000000
Sep-10109860000001022700000040510000003574000000
Dec-10112330000001093700000040540000003689000000
Mar-11118170000001108900000040960000003789000000
Jun-11124610000001147700000040420000003865000000
Sep-11117260000001126900000042480000003863000000
Dec-11121940000001149600000044410000003811000000
Mar-12115840000001186200000040080000003827000000
Jun-12117730000001164200000041110000003813000000
Sep-12117680000001155500000041040000003835000000
Dec-12113580000001133600000040010000003834000000
Mar-13116270000001150300000040400000003753000000
Jun-13113280000001152000000041530000003837000000
Sep-13121410000001230100000042320000003932000000
Dec-13133340000001177100000040590000003901000000
Mar-14136260000001215300000042200000003927000000
Jun-14124390000001221700000042190000003963000000
Sep-14120780000001230200000043110000003978000000
Dec-14123260000001270500000049140000004153000000
Mar-15123300000001245200000050580000004217000000
Jun-15119310000001263500000053150000004247000000
Sep-15128260000001328100000056340000004369000000
Dec-15121390000001291900000055470000004405000000
Mar-16120530000001250000000057200000004451000000
Jun-16123350000001282700000056110000004507000000
Sep-16120200000001273400000056390000004475000000
Dec-16119430000001282000000057880000004532000000
Mar-17126090000001356100000058490000004800000000
Jun-17134780000001394600000060220000004792000000
Sep-17134170000001349600000061260000004871000000
Dec-17143950000001494600000062040000004970000000
Mar-18135900000001535900000063180000005105000000
Jun-18142930000001559000000064640000005320000000
Sep-18151290000001600600000063380000005516000000
Dec-18146820000001588100000064790000005668000000
Mar-19148130000001578000000065050000005796000000
Jun-19151530000001592200000065940000005889000000
Sep-19148500000001600900000066290000005985000000
Dec-19153360000001624800000067380000006079000000
Mar-20155570000001564100000063900000005732000000
Jun-20147310000001248200000038390000003968000000
Sep-20145310000001360700000040840000003696000000
Dec-20147390000001470900000033740000004011000000
Mar-21144880000001601000000026580000004239000000

Services deficit continues to grow

New Zealand’s seasonally adjusted services deficit was $1.6 billion, $945 million wider than the December 2020 quarter.

“Rises in services imports and falls in services exports contributed to the widening of the deficit,” Mr Allan said.

Seasonally adjusted services exports fell for the second quarter in a row. Compared with last quarter, services exports fell by $716 million to $2.7 billion. Conversely, seasonally adjusted services imports rose by $228 million, to $4.2 billion.

The value of services exports and services imports remain well below pre-COVID-19 levels. Compared with the March 2020 quarter, service exports were down $3.7 billion, while service imports were down $1.5 billion.

Smallest net international investment liability position since 2018

The international investment position, or the difference between New Zealand’s financial assets and liabilities with the rest of the world, changed significantly between 31 December 2020 and 31 March 2021. New Zealand remained in a liability position, meaning New Zealand has more liabilities with the rest of the world than assets. However, this liability position narrowed by $17.4 billion to $160.9 billion. New Zealand has not had a liability position this small since September 2018.

“The liability position is the smallest it’s been in a couple of years, but what’s really interesting is how much it shrank this quarter. It’s the biggest quarterly change in New Zealand’s liability position in over 20 years,” Mr Allan said.

QuarterNet international investment position
Jun-00-91720000000
Sep-00-94170000000
Dec-00-93038000000
Mar-01-87880000000
Jun-01-91228000000
Sep-01-90606000000
Dec-01-79305000000
Mar-02-84558000000
Jun-02-85140000000
Sep-02-86443000000
Dec-02-88328000000
Mar-03-89589000000
Jun-03-92767000000
Sep-03-94772000000
Dec-03-96145000000
Mar-04-1.00596E+11
Jun-04-99623000000
Sep-04-1.06093E+11
Dec-04-1.11481E+11
Mar-05-1.10773E+11
Jun-05-1.1151E+11
Sep-05-1.16818E+11
Dec-05-1.20665E+11
Mar-06-1.18345E+11
Jun-06-1.18985E+11
Sep-06-1.24574E+11
Dec-06-1.30589E+11
Mar-07-1.29757E+11
Jun-07-1.33418E+11
Sep-07-1.35949E+11
Dec-07-1.35977E+11
Mar-08-1.38295E+11
Jun-08-1.42605E+11
Sep-08-1.52257E+11
Dec-08-1.55609E+11
Mar-09-1.59685E+11
Jun-09-1.56598E+11
Sep-09-1.5633E+11
Dec-09-1.53842E+11
Mar-10-1.52424E+11
Jun-10-1.54495E+11
Sep-10-1.46289E+11
Dec-10-1.42898E+11
Mar-11-1.26218E+11
Jun-11-1.3055E+11
Sep-11-1.40663E+11
Dec-11-1.43143E+11
Mar-12-1.42532E+11
Jun-12-1.4515E+11
Sep-12-1.45995E+11
Dec-12-1.4956E+11
Mar-13-1.47518E+11
Jun-13-1.48719E+11
Sep-13-1.47244E+11
Dec-13-1.44969E+11
Mar-14-1.50719E+11
Jun-14-1.50662E+11
Sep-14-1.51474E+11
Dec-14-1.54648E+11
Mar-15-1.50372E+11
Jun-15-1.45068E+11
Sep-15-1.49955E+11
Dec-15-1.49238E+11
Mar-16-1.55118E+11
Jun-16-1.5928E+11
Sep-16-1.6421E+11
Dec-16-1.53277E+11
Mar-17-1.47659E+11
Jun-17-1.49653E+11
Sep-17-1.49078E+11
Dec-17-1.49357E+11
Mar-18-1.49602E+11
Jun-18-1.53766E+11
Sep-18-1.56125E+11
Dec-18-1.69391E+11
Mar-19-1.64291E+11
Jun-19-1.67453E+11
Sep-19-1.72181E+11
Dec-19-1.71174E+11
Mar-20-1.79336E+11
Jun-20-1.80284E+11
Sep-20-1.77197E+11
Dec-20-1.78378E+11
Mar-21-1.60947E+11

Market price changes reduce net liability position

Changes in the local and global financial markets affected the value of our international assets and liabilities. International equity markets performed well this quarter driving up the value of New Zealand’s assets by $5.8 billion. Meanwhile, New Zealand equities underperformed compared to most global counterparts. This poor performance drove down the value of our liabilities by $6.0 billion.

“More simply, the value of international shares held by New Zealand resident investors rose. At the same time, foreign investors saw the value of their shares in many NZX-listed companies fall this quarter,” Mr Allan said.

The net market price changes resulted in a $11.8 billion narrowing of the overall net liability position.

/Stats NZ Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.