Annual current account deficit shrinks to -2.5% of GDP, down from -2.7% in March and as expected. But exports fall in June quarter

New Zealand's seasonally adjusted current account balance was a $2.0 billion deficit in the June 2014 quarter, up $1.4 billion from the March 2014 quarter's deficit according to data released by Statistics NZ today.

Exports of goods were lower by $1.1 billion in the June quarter than the March quarter.

For the year ended June 2014, the current account deficit was $5.8 billion or 2.5% of GDP. That was an improvement from the 2.7% of GDP for the year ended March 2014.

New Zealand's net international liability position was $149.7 billion or 65.3% of GDP at 30 June 2014  which was $1.4 billion lower than at 31 March 2014.

New Zealand's external debt position increased $2.0 billion, to $142.3 billion or 62.1% of GDP as at 30 June 2014.

Most of today's data was as the market was expecting and the New Zealand dollar had little reaction.

Statistics NZ are now using an updated format of reporting and that means New Zealand's balance of payments and international investment position data is now directly comparable with that of most of our major trading partners.

There was a $549 million net inflow of foreign investment into New Zealand during the June 2014 quarter.

Fund managers buying overseas debt securities and company shares made up most of the $4,245 million of New Zealand investment abroad this quarter. This was more than offset by $4,794 million of foreign investment into New Zealand in the same period, which was mostly made up of foreign investors purchasing debt securities issued by New Zealand banks.

New Zealand's net external debt position was $142.3 billion (62.1 percent of GDP) at 30 June 2014, $2.0 billion larger than at 31 March 2014.

The net external debt position increased despite an improved net international liability position because the latter was driven by increases in New Zealand's overseas equity assets. The larger external debt position was mainly due to increased overseas borrowing (in the form of issuing debt securities) by New Zealand banks during the quarter.

There is now only one-quarter of overseas reinsurance claims from Canterbury earthquakes left to settle

Total international reinsurance claims from the Canterbury earthquakes are now estimated at $19.7 billion, up from an estimated $19.1 billion in the previous quarter.

At 30 June 2014 a total of $14.8 billion of these claims were settled with overseas reinsurers, leaving $4.9 billion of claims outstanding. These outstanding claims are included as assets in New Zealand's international investment position.