New Zealand's Exports, Imports Continue To Fall; Deficit Shrinks
11/27/2009 2:49 AM ET
(RTTNews) -
New Zealand's exports dropped at a sharp pace in October, extending the fall for a fifth straight month, official data showed Friday. Sluggish domestic demand led to larger decline in imports.
Exports slid 22.4% annually to NZ$3 billion in October following a 10.9% drop in September, Statistics New Zealand reported on Friday. Shipments have been falling since June. Exports of milk powder, butter, and cheese were the largest contributor to the decline, down NZ$318 million or 32% from a year ago.
At the same time, imports plummeted 28.3% to NZ$3.5 billion, faster than the 23.4% decline seen in September. That was the seventh consecutive drop in imports. The main contributors behind the fall were petroleum and petroleum products and mechanical machinery and equipment.
"Imports and exports are showing sustained declines from the high 2008 levels," government statistician Geoff Bascand said.
New Zealand's trade deficit stood at NZ$487 million in October compared to the NZ$563 million deficit in the previous month. The trade deficit was roughly in line with expectations for a NZ$480 million deficit. The country has been registering a trade deficit since June this year.
The trade deficit remains small for the time of year, economists at Westpac bank said. According to them, the annual trade balance may soon turn positive for the first time since 2002.
"It is interesting to note that the 2002 trade surplus was achieved when the NZD/USD exchange rate was around 0.47, whereas this time a surplus will be achieved with the exchange rate above 0.70," Westpac said. "This is testament to the huge improvement in New Zealand's terms of trade over the past five years."
By destination, exports to Asia fell the most in October, down by 23.2% year-on-year followed by shipments to OECD with a 21.4% drop. Exports to APEC were down 20.2% and those to EU fell 9.5%.
At the same time, imports from Asia dropped the most, by 33.1%. It was followed by those from APEC with a 27.5% fall, EU with a 27.2% decline, OECD with a 23.9% fall. Imports from Europe slipped 15.6%.
In the 12 months ended October 31, exports were down 4%, while imports fell 12.2%, resulting in a trade deficit of NZ$1.16 billion. It is the smallest deficit in almost seven years.
by RTT Staff Writer
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