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.
Key Quotes
“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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