New Zealand’s annual current account deficit likely remained stable

New Zealand's current account deficit in seasonally adjusted terms in expected to have widened in Q4, with both goods and services trade balance dropping. However, the quarterly projections leave the annual current account deficit nearly unchanged. It is likely to remain steady at 3.3% of GDP. This is because a huge deficit in Q4 2014 will be dropping out of equation.

In Q4, goods trade deficit widened as lower dairy export earnings were only partially countered by a decline in petroleum import prices. The weakness in goods trade was not counter by a rebound in services deficit like in the earlier quarters.

Visitors from abroad seem to have declined in Q4, in spite a record number of arrivals. The investment income deficit has likely narrowed to about $2.2bn in Q4, suggesting lower profits earning by overseas-owned firms. The projections suggest a rebound in annual balance as the deficit in Q4 2014 had reached nearly $2.6bn.