Statistics NZ said today New Zealand’s seasonally adjusted current account deficit narrowed to $1.9 billion in the December quarter – the smallest deficit since the September 2017 quarter.
The main driver were rises in dairy & meat exports, particularly to China.
The latest figures, for the December 2019 year – before the Covid-19 viral outbreak – showed that 19% of spending by overseas visitors in New Zealand was by Chinese visitors & students.
The Government placed temporary restrictions on 2 February on entry into New Zealand for all foreign nationals travelling from or transiting through mainland China in response to the outbreak of Covid-19.
International statistics senior manager Peter Dolan said: “China is our top trading partner & a key market for travel services. Without visitors & students from China, New Zealand’s services surplus for the December 2019 year would have fallen from $4.2 billion to $1.2 billion and, as a result, the annual current account deficit for the year ended December 2019 would have widened from $9.2 billion to $12.3 billion.”
China is also a significant contributor to our trade in goods, accounting for 28% of goods exports & 20% of goods imports for the December 2019 year.
Key international economic indicators
The current account deficit for the year was $9.2 billion, equating to 3% of gross domestic product (gdp).
The net international investment position – the difference between New Zealand’s assets & liabilities with the rest of the world – was a net international liability at 31 December of $170.9 billion, 54.9% of gdp.
Net external debt (a narrower measure of a country’s external financial position excluding equity & financial derivatives) was $151.9 billion, 48.8% of gdp.
You can see details of the Government’s economic response package in the link below:
Government guidance update, 17 March 2020: COVID-19: Guidance for businesses
Attribution: Statistics NZ, Government.