Fall in imports drives current account surplus

New Zealand’s COVID-19 lockdown saw imports fall more than exports, leading to a record current account surplus of $0.5 billion in the June 2020 quarter, Stats NZ said today.

“New Zealand earned more than it spent in transactions with the rest of the world due to a sharp slowdown in international trade because of COVID-19,” international statistics senior manager Peter Dolan said.

“This reflects a slump in demand for oil imports and in spending by international tourists, while dairy exports held up in the June quarter, boosting the current account into the black.”

New Zealand’s seasonally adjusted current account surplus of $0.5 billion in the June 2020 quarter is the biggest in the series since 1971, and compares with a $1.4 billion deficit in the March 2020 quarter.

“A current account surplus occurs when New Zealand’s earnings from the rest of the world from exports, income on investments, and secondary income are larger than our expenses to the rest of the world,” Mr Dolan said.

“This is only the 11th quarterly seasonally adjusted current account surplus in the series. New Zealand typically runs a deficit, spending more than we earn – the last time we had a surplus was 11 years ago.”

Year ended in 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-001177000000 -622000000-1798000000
Mar-011288000000 -312000000-1600000000
Jun-011511000000 44000000-1467000000
Sep-011498000000 -99000000-1596000000
Dec-011026000000 -659000000-1685000000
Mar-02 450000000-1091000000-1540000000
Jun-021435000000 -306000000-1741000000
Sep-021006000000 -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-06-220000000-2717000000-2498000000
Sep-06 -29000000-2668000000-2639000000
Dec-06-146000000-3010000000-2864000000
Mar-07-272000000-3224000000-2952000000
Jun-07-343000000-3282000000-2940000000
Sep-07 -35000000-3260000000-3226000000
Dec-07 501000000-2688000000-3189000000
Mar-08 79000000-3191000000-3270000000
Jun-08-894000000-4262000000-3368000000
Sep-08-619000000-3915000000-3296000000
Dec-08 132000000-3189000000-3321000000
Mar-091059000000-1940000000-2999000000
Jun-091046000000 -314000000-1360000000
Sep-091369000000 339000000-1030000000
Dec-09 786000000-2436000000-3222000000
Mar-101243000000 -489000000-1732000000
Jun-101679000000 -890000000-2568000000
Sep-101233000000 -984000000-2217000000
Dec-10 662000000-2155000000-2818000000
Mar-111039000000-1642000000-2681000000
Jun-111161000000-1250000000-2411000000
Sep-11 835000000-1725000000-2560000000
Dec-111331000000-1301000000-2632000000
Mar-12 -92000000-2489000000-2396000000
Jun-12 430000000-2233000000-2662000000
Sep-12 469000000-1785000000-2254000000
Dec-12 195000000-1971000000-2166000000
Mar-13 418000000-1961000000-2378000000
Jun-13 123000000-2149000000-2272000000
Sep-13 122000000-2082000000-2204000000
Dec-131731000000 -848000000-2580000000
Mar-141777000000 -779000000-2556000000
Jun-14 475000000-2169000000-2644000000
Sep-14 87000000-2289000000-2377000000
Dec-14 394000000-2268000000-2662000000
Mar-15 730000000-1699000000-2429000000
Jun-15 360000000-2114000000-2474000000
Sep-15 782000000-1353000000-2135000000
Dec-15 381000000-1787000000-2169000000
Mar-16 828000000-1132000000-1960000000
Jun-16 606000000-1406000000-2012000000
Sep-16 422000000-1889000000-2310000000
Dec-16 411000000-1481000000-1893000000
Mar-17 86000000-2629000000-2716000000
Jun-17 754000000-1744000000-2498000000
Sep-171142000000-1867000000-3009000000
Dec-17 751000000-2182000000-2933000000
Mar-18-600000000-3442000000-2842000000
Jun-18-171000000-3204000000-3034000000
Sep-18 -91000000-2844000000-2753000000
Dec-18-279000000-3106000000-2827000000
Mar-19-342000000-2948000000-2606000000
Jun-19 -91000000-2763000000-2672000000
Sep-19-548000000-2852000000-2304000000
Dec-19 -95000000-1975000000-1880000000
Mar-20 446000000-1381000000-1827000000
Jun-202158000000 482000000-1676000000

The current account surplus was driven by the goods balance turning from a deficit into a $2.2 billion surplus. Exports fell $0.8 billion in the quarter but imports fell much more, down $3.2 billion.

Year ended in quarterGoods exportsGoods importsServices exportsServices imports
Jun-006906662070684130054427456114942381733845
Sep-007547859492719250631127843798222517872337
Dec-008367062550761777411331245749552697289374
Mar-018126228585734518244931690439492661869988
Jun-018348519753734455930931286956012622024706
Sep-018369860766747228549831328984212532878860
Dec-018014001025748607369430696762972571712522
Mar-028010260007837803139434518975662634317252
Jun-027970195489732473157933988060952609457504
Sep-027762059882767346802435022365592585160965
Dec-027422167118766571754236198999292584997768
Mar-037368400943739833201033880987192443326350
Jun-037150059945741806199334226511082425724753
Sep-037207915561741845229735657438592561680169
Dec-037163592936760512789435732691412538863561
Mar-047551043569806531155135268830302602766033
Jun-048141676430847563738138339753632731785065
Sep-047474711936827821132936195636692813255441
Dec-047776123918858967226834981789842857172795
Mar-057788803325854927909635521481492947440994
Jun-057803616612880106119635000084992994058539
Sep-057721387640920754682438308915392995162993
Dec-057949797209902010178635659141672993465985
Mar-068023853243935877838436934302533079312456
Jun-068849789189974197127938167546453144401113
Sep-069295351033989797790837280374223154808345
Dec-068573654646952630736738915380763085093479
Mar-078819864067987055222839218731383143628439
Jun-078677512351972244413139025523323200314487
Sep-079024086553979506369940350120173298535408
Dec-07104617931301056139873039877946093386928846
Mar-08104709581101102430613040650977153432899339
Jun-08105182502201191516633042506918793747827414
Sep-08112452770901217676613040364746003724374013
Dec-08115353974501165515630041037407443852294787
Mar-09108278069701030572635042250410553687783586
Jun-0910152741890961540338439283136243419747674
Sep-099768121086917065029241072487233335535950
Dec-099384776909926113056239806473323318430685
Mar-1010566831410979280539639015040513432614465
Jun-10112005770201009537832040559295413482439896
Sep-10109828986001022731067040510680153574097357
Dec-10112342384201093717063040544101363689039655
Mar-11118196101101108851442040961952563788759051
Jun-11124616961501147734018040419339593865088725
Sep-11117196943701126961524042475204363862927479
Dec-11121971541301149602046044408805683810809026
Mar-12115884054601186192974040084260183827087442
Jun-12117736338801164218828041112435953812944797
Sep-12117561643501155550523041040986733835382085
Dec-12113641405101133556713040007036363834496943
Mar-13116335708601150326112040403424313752935790
Jun-13113272882701152017938041527933933836996495
Sep-13121237519901230098758042316252323932233598
Dec-13133438193401177044804040588440893900920593
Mar-14136369158601215288799042195448913926538028
Jun-14124364515601221703549042186055703962708360
Sep-14120552296701230111690043113499513978084870
Dec-14123382378201270500563049137782294152628637
Mar-15123423436101245343507050581053554216890871
Jun-15119294465101263690310053144252914246986906
Sep-15127930329401327664518056338895624368644382
Dec-15121585280101291893482055470277054405206169
Mar-16120634689201250477203057201418994451011861
Jun-16123353721601283203085056104059294507414643
Sep-16119806049101272336416056397024724475101744
Dec-16119708474001281634629057887235734531785270
Mar-17126150879401357750923058487210494799822860
Jun-17134806075901395566506060211924494791911725
Sep-17133644122901347794870061266973014870897326
Dec-17144396878901492307797062047691814970004516
Mar-18135921616301540467306063182275075105679894
Jun-18142977142001561095648064621067495319439094
Sep-18150599426801597404016063383904765515466479
Dec-18147348946601582646294064808867745667954755
Mar-19148152323101586509665065049666045796791104
Jun-19151586456501595198887065905158245888623496
Sep-19147768488601597020813066297671975984837554
Dec-19154000333601615637810067408437366079511224
Mar-20155521315101576321600063909271215733820486
Jun-20147399699301251342106038927004363961093380

“Domestic demand for crude oil imports fell as people stayed home due to the COVID-19 lockdown in the first half of the June quarter,” Mr Dolan said.

“Crude oil imports were much lower than usual from April to June 2020, with much less travel by road and air. Oil imports fell to zero in July, just after the end of the June 2020 quarter. With only essential businesses allowed to operate during alert levels 3 and 4, wholesale and manufacturing trade also shrank, reducing the imports required for production and further hitting related suppliers.”

See Crude oil imports dry up in July and Manufacturing and wholesale trade: June 2020 quarter for further information.

Services balance in deficit

New Zealand’s services balance was in deficit for the first time since the September 1998 quarter.

Exports of services were $3.9 billion in the June 2020 quarter, down $2.5 billion from the March 2020 quarter. Travel services were $2 billion for the quarter, down 48 percent (or $1.9 billion), after the border was closed to overseas visitors.

Imports of services were also down in the June 2020 quarter, by $1.8 billion. At $4 billion it is the smallest quarterly value since the March 2014 quarter.

“Overseas tourist spending on travel and transportation services took a big hit in the latest quarter as border crossings were restricted. However, there were still international visitors in the country from before the lockdown and the limited number of flights increased the cost of transporting freight,” Mr Dolan said.

See COVID-19 knocks spending by overseas visitors and students, Export prices hit new high and the New Zealand International Trade dashboard for further information.

For the year to June 2020 the current account deficit was $5.8 billion, or 1.9 percent of gross domestic product (GDP). This compares to $11.6 billion (3.8 percent of GDP) for the year to June 2019. This is the smallest the current account has been as a percentage of GDP since the year ended June 2010, when it was 1.7 percent of GDP.

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