New Zealand posted a current account deficit of NZ$2.770 billion in the fourth quarter of 2017, Statistics New Zealand said on Wednesday.
That missed forecasts for a shortfall of NZ$2.450 billion following the NZ$4.833 billion deficit in the three months prior.
The current account/GDP ratio was down 2.7 percent on year, also missing expectations for a fall of 2.6 percent following the 2.5 percent decline in the previous three months.
The seasonally adjusted current account deficit was NZ$2.0 billion.
The seasonally adjusted goods deficit was $465 million for Q4, $385 million wider than in the September 2017 quarter.
“More transport equipment and crude oil imports both contributed to an increase in the goods deficit this quarter, despite more dairy and logs being exported,” international statistics senior manager Daria Kwon said.
The seasonally adjusted services surplus remained steady in the fourth quarter, at NZ$1.2 billion, the same level as for the third quarter. Increases in New Zealanders’ spending abroad and overseas visitors’ spending in New Zealand were roughly the same, leading to a small drop in the services surplus.
Overall, the income deficit remained steady in the December 2017 quarter, widening only NZ$6 million to $2.7 billion. Overseas investors had a larger increase in the income they earned from their New Zealand investments than that New Zealanders earned from their investments abroad.
“High levels of foreign direct investment income can indicate a strong New Zealand economy with higher profits for New Zealand-based companies,” Kwon said.
The increase in the primary income deficit was mostly offset by a net inflow of secondary income, which includes tax paid by foreigners on their interest or dividends earned in New Zealand.
The financial account showed a net inflow of NZ$1.5 billion in the fourth quarter. This was driven by a withdrawal of New Zealand assets held abroad (an inflow of money into New Zealand), mainly due to the treasury withdrawing debt securities.
New Zealand’s net international liability position in Q4 was NZ$155.2 billion (54.8 percent of GDP), continuing a downward trend. Strong performance by overseas stock markets and valuation changes increased New Zealand’s overseas assets more than its liabilities.