New Zealand’s unadjusted monthly trade deficit widened $90m in September to $1,560m as both exports and imports surprised on the upside, with large items (aircraft) adding $275m to the import side and accounting for much of the surprise, explains the research team at ANZ.
Key Quotes
“On a seasonally adjusted basis, exports rose 9.2% m/m, with dairy up 9.7% m/m on higher volumes and prices (the weaker NZD is clearly doing its job here, but there are downside risk in the global market).”
“Seasonally adjusted imports lifted a solid 11.6% m/m. However, the 6.4% fall in mechanical machinery and equipment is a tentative sign that investors are cautious at present. But these data are volatile.”
“On a quarterly basis, the seasonally adjusted goods deficit narrowed $300m to $1.1bn – not enough to prevent a widening annual goods deficit in the upcoming Q3 Balance of Payments.”
“Despite recent slippage in world prices for some of our key exports, the annual deficit is expected to narrow over the year ahead, reflecting solid dairy volumes and NZD weakness. As always, however, much depends on the global situation, particularly China. And it’s fair to say things are looking a little more wobbly on that front.”
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