New Zealand Q3 current account deficit narrows to 3.3% of GDP

The current account deficit narrowed to 3.3% of GDP in the year to September, from a revised 3.4% in June. The revision was due to a range of small positive revisions in the June quarter. The deficit was only slightly smaller than the market expected, and there was no reaction in the NZ dollar.

In seasonally adjusted terms, the goods trade deficit narrowed slightly in the September quarter. Low dairy export prices were counteracted by strong volume growth in dairy and meat exports. In contrast, trade in services moved further into surplus as tourist spending continued its recent surge.

Reinsurance claims resulting from the Canterbury earthquakes continued to slow, with just $273m claimed in the September quarter, leaving an estimated balance of $3b. Today's release has no obvious implications for tomorrow's September quarter GDP report. A 0.9% increase is expected.