NZ earns more abroad as Sept qtr current account better than June

New Zealand's seasonally adjusted current account deficit for the September 2008 quarter was NZ$4.079 billion, NZ$571 million smaller than the June 2008 quarter deficit, figures from Statistics New Zealand (Stats NZ) show. The quarterly decrease in the deficit was due to a contraction of the investment income deficit, Stats NZ said. Income earned by foreign investors from their shareholdings in New Zealand companies fell, while income from New Zealand investments abroad rose slightly. However, in the year to September 2008, New Zealand's current account deficit rose to NZ$15.5 billion (8.6% of GDP), compared to NZ$15 billion (8.4% of GDP) in the year to June. This was in line with expectations. "The main driver of the increase in the September year deficit was an increase in the value of imports of goods, mainly due to higher prices for petroleum and petroleum products," Government Statistician Geoff Bascand said. The quarter-on-quarter current account deficit fell as New Zealand's investment income deficit contracted by NZ$396 million to NZ$3.248 billion in the September quarter. "New Zealand investors' earnings from abroad were up by NZ$34 million," Bascand said. "The rise in income earned from New Zealand's investments abroad this quarter was mainly driven by a NZ$74 million rise in dividends and interest earned from New Zealand's portfolio investments abroad." "Foreign investors' earnings from their investments in New Zealand were NZ$4.018 billion in the September 2008 quarter, down NZ$362 million from the June 2008 quarter. The key feature was a fall in income earned by foreign direct investors and portfolio investors from their equity investments in New Zealand companies. Profits earned by foreign direct investors fell by NZ$152 million and dividends paid to foreign portfolio investors fell by NZ$109 million." The services balance deficit grew from NZ$216 million in the June quarter to NZ$237 million in the September quarter as income from tourism declined. "Exports of services fell NZ$62 million over the quarter, mainly due to a NZ$111 million decrease in travel services. Exports of travel services measures the expenditure of foreign tourists in New Zealand. The number of visitors to New Zealand increased between the June 2008 and September 2008 quarters, but visitors stayed for shorter periods, and on average spent less per person," Bascand said. The goods balance deficit was NZ$898 million in the September quarter, compared with NZ$1.078 billion in the June quarter. Exports of goods rose by NZ$408 million over the quarter, while imports of goods rose NZ$226 million. "The increase in the value of exports of goods was the result of higher merchandise export prices in the latest quarter. A rise in the value of forestry products exports was the main driver behind the higher exports figure. Increasing prices for dairy products (up 7.4%) also contributed to the higher value for goods exports, but this was partly offset by a fall in volumes. All goods export categories recorded price increases this quarter, while volumes were down for all categories except forestry products," Bascand said.