Trade deficit in September worst in almost 3 years

New Zealand's trade deficit doubled to NZ$1.18 billion in the month of September as exports grew 8% from the same month a year ago and imports grew 21.4%. The deficit was worse than expected and is likely to deepen economists' forecasts for a contraction in GDP in the September quarter. The figures show the full effects of the New Zealand dollar's slump in October have yet to show through and that import growth remains relatively strong despite the economic slowdown, although falling commodity prices in recent weeks are likely to suppress the expected commodity export revenue rebound.   Meat and dairy export growth was modest as commodity prices eased off, while crude oil export growth from the Tui field moderated. Imports of diesel and fertiliser soared because of strong demand from farmers and higher prices. This was the largest monthly trade deficit since November 2005, and the largest 'regular' deficit (excluding large one-off imports) since at least 2002. The result was significantly worse than economists forecasts of NZ$550 million to NZ$750 million. New Zealand exported a total of NZ$3.167 billion worth of merchandise and imported a total of NZ$4.35 billion during September. Exports during the month of September rose 8% from the same period last year and imports rose 24%. The seasonally adjusted trade balance for the September 2008 quarter was a deficit of NZ$1.547 billion. This was down from the NZ$1.849 billion recorded in last quarter, but was NZ$675 million greater than the March 2008 quarter. The September 2008 quarter deficit was equivalent to 14.3% of exports, which compares with an average deficit of 13.9% since December 2001, the last quarter to show a surplus. Seasonally adjusted exports rose 5.4% in the September quarter from the June quarter, which was an improvement on a flat result in the June quarter. Imports rose 2.1% for the September quarter, which was slower growth than the 8.6% growth in the June quarter. For the month of September, petroleum imports rose 35% from the same month last year, to NZ$622 million. Petroleum imports rose 44% over the year to September. Exports of milk powder, butter and cheese rose 42.4% over the year. For the month of September they fell 4.8% from the same period in 2007. Imports in the month of September did not include any individual items worth over NZ$100 million. In November 2005, the trade deficit of NZ$1.23 billion included NZ$209 million in large import items. Australia remained the top destination for New Zealand exports and imports, buying NZ$858 million worth of New Zealand merchandise over the month of September. Over the year to September exports to Australia rose by 34%. New Zealand imported NZ$819 million worth of merchandise from Australia in September, up from NZ$716 in September last year. Over the year, imports from Australia rose 2.8% to NZ$8.79 billion. America was the second biggest importer of New Zealand goods (NZ$297 million) and Japan was third with NZ$253 million. New Zealand exports to China rose by 17.6% over the year to September, showing the effects of the recently signed free trade deal between the two countries. In the month of September, exports to China totaled NZ$201 million, up from NZ$168 in September 2007. New Zealand imported NZ$662 million worth of goods from China in the month of September. This was up 25% from the NZ$530 million imported in September 2007. Over the year, imports from China rose 12.1% to NZ$6.1 billion. Exports to the United Kingdom fell 5.8% over the year to September.