Quarterly Current Account Deficit $7.3 Billion

New Zealand's seasonally adjusted current account deficit widened by $0.3 billion to $7.3 billion in the March 2024 quarter, according to figures released by Stats NZ today.

Services exports fall

In the March 2024 quarter, the seasonally adjusted services deficit widened by $1.1 billion.

Services exports fell $0.9 billion, driven by travel exports (spending by overseas visitors while in New Zealand).

"In the March 2024 quarter, the seasonal peak in visitor spending was less pronounced than it has been in the past," institutional sectors senior manager Paul Pascoe said.

"Once seasonal factors were removed, the adjusted visitor spending fell."

Seasonally adjusted time series show the long-term underlying picture, by removing seasonal variation. After a period of significant disruption during COVID-19, Stats NZ will continue to review how we adjust for seasonal patterns.

$1.0 billion rise in goods exports

In the March 2024 quarter, the seasonally adjusted goods deficit narrowed by $0.4 billion, driven by a $1.0 billion increase in goods exports. Fruit, dairy, logs and wood products were the main contributors. Goods imports also increased by $0.6 billion, driven by consumption goods, for example clothing.

"Even though the goods deficit narrowed slightly this quarter, goods, services, and primary income have all been in deficit since the December 2020 quarter," Pascoe said.

The primary income deficit narrowed by $0.5 billion to $3.0 billion. A primary income deficit shows that New Zealanders earned less from their investments overseas than overseas investors earned from their investments in New Zealand.

International investment position

The net international investment position represents the difference between New Zealand's financial assets and liabilities with the rest of the world. New Zealand has a net liability position as we have more liabilities with the rest of the world than assets.

At 31 March 2024, New Zealand's net international investment liability position was $199.1 billion (48.7 percent of gross domestic product (GDP)), $11.2 billion narrower than $210.3 billion (52.0 percent of GDP) as at 31 December 2023.

The narrowing of the net international investment liability position reflected New Zealand's international assets increasing more than its liabilities.

"In the March 2024 quarter, the increase in New Zealand's international assets was mainly due to a combination of strong global stock market performance and a depreciation of the New Zealand dollar against major currencies," Pascoe said.

Annual current account deficit $27.6 billion

New Zealand's annual current account deficit was $27.6 billion (6.8 percent of GDP) in the year ended 31 March 2024.

This compares to a $27.9 billion deficit in the year ended 31 December 2023 (6.9 percent of GDP).

A current account deficit indicates that New Zealand is spending more than it is earning overseas. The size of the current account balance in relation to GDP shows its significance to New Zealand's overall economy.