| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$-475M | NZ$-1,863M | NZ$-2,180M |
| Imports - M/M | -10.4% | 0.5% | 2.0% |
| Imports - Y/Y | 1.8% | 26.3% | 26.1% |
| Exports - M/M | -1.6% | 8.1% | 2.4% |
| Exports - Y/Y | 10.5% | 17.7% | 11.8% |
Highlights
New Zealand's merchandise trade deficit narrowed from NZ$2,180 million in November to NZ$475 million in December. Exports and imports both fell on the month after previous increases.
Exports fell 1.6 percent on the month in December after advancing 2.4 percent in November and rose 10.5 percent on the year after a previous increase of 11.8 percent. Exports of dairy products, fruit, and forestry products rose strongly, offset by a year-over-year decline in meat exports. Exports rose at a solid pace on the year to Australia, the United States, Japan, and the European Union but exports to China were little changed after falling on the year in each of the previous two months.
Imports fell 10.4 percent on the month in December after increasing 2.0 percent in November, while year-over-year growth slowed sharply from 26.1 percent to 1.8 percent. Growth in fuel imports slowed as the base effects of big increases last year begin to moderate, while imports of vehicles, electrical machinery and equipment, and textiles recorded year-over-year declines. Imports rose on the year from most major trading partners, with the exception of China and South Korea.
Exports fell 1.6 percent on the month in December after advancing 2.4 percent in November and rose 10.5 percent on the year after a previous increase of 11.8 percent. Exports of dairy products, fruit, and forestry products rose strongly, offset by a year-over-year decline in meat exports. Exports rose at a solid pace on the year to Australia, the United States, Japan, and the European Union but exports to China were little changed after falling on the year in each of the previous two months.
Imports fell 10.4 percent on the month in December after increasing 2.0 percent in November, while year-over-year growth slowed sharply from 26.1 percent to 1.8 percent. Growth in fuel imports slowed as the base effects of big increases last year begin to moderate, while imports of vehicles, electrical machinery and equipment, and textiles recorded year-over-year declines. Imports rose on the year from most major trading partners, with the exception of China and South Korea.
Definition
The international trade balance measures the difference between imports and exports of both tangible goods and services. Imports may act as a drag on domestic growth and they may also increase competitive pressures on domestic producers. Exports boost domestic production. Trade balance values are calculated by deducting imports (cif) from exports (fob).
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the NZ dollar in the foreign exchange market. Imports indicate demand for foreign goods in New Zealand. Exports show the demand for NZ goods in countries overseas. The currency can be sensitive to changes in the trade deficit run by New Zealand since this trade imbalance creates greater demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation.
