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New Zealand’s Q2 current account deficit widened to -3.3% of GDP (mkt -2.9%) a combination of a trade surplus and drag from net income (outflows were larger than expected), notes the research team at TD Securities.

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“So while the deficit was wider, what matters for growth is that trade  per se  is healthy via strong export growth. We confirm that trade is expected to add around ¼%pts to GDP growth, released tomorrow (TD and mkt +0.8%/q). As an aside, net foreign debt at -52% of GDP is the lowest on record, and combined with a low current account deficit and a string of fiscal surpluses, we still wonder why NZ at AA is two notches below Australia at AAA (SnP).”

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