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Michael Gordon, senior economist at Westpac, notes that the New Zealand’s current account deficit widened from 3.6% to 3.7% of GDP in the year to December, a smaller increase than Westpac expected.

Key Quotes

“The balance of goods trade moved further into deficit, offset by higher tourism earnings and solid investment income inflows.”

“The deficit has widened over the last year due to a decline in the terms of trade and, until recently, high import volumes.”

“With trade prices turning more favourable in recent months, we expect the current account deficit to narrow again over 2019.”