NZ: Current account deficit narrowed in Q4 – ANZ

ANZ analysts point out that the New Zealand’s unadjusted quarterly current account deficit narrowed in Q4 from $6.2bn to $3.3bn.

Key Quotes

“The goods deficit narrowed as seasonal agricultural production gave exports a boost and imports remained broadly stable. Meanwhile, the unadjusted services balance flipped from deficit to surplus reflecting the seasonal lift in inbound tourists, and the income deficit narrowed marginally to $2.5bn.”

“The annual deficit widened to $11.0bn in Q4 from $10.6bn in Q3, which saw the current account as a share of GDP tick up 0.1%pts to 3.7%, which is just a smidgeon above its historical average of 3.6%.”

“In seasonally adjusted terms, the quarterly current account deficit was unchanged from Q3 at $2.5bn, $0.4bn narrower than we had pencilled in. Data revisions accounted for $0.1bn of the surprise, while a smaller widening in the goods deficit, a stable services surplus (versus expectations for a minor narrowing), and narrowing income deficit (versus expectations for a slight widening) explained the rest.”

“Looking forward, we expect the annual current account deficit will remain around 4% of GDP over the next year or so, but as always there are a number of moving parts.”