| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$-1,954M | NZ$-475M | NZ$-636M |
| Imports - M/M | -10.9% | -10.4% | -11.1% |
| Imports - Y/Y | 25.6% | 1.8% | 1.3% |
| Exports - M/M | 5.1% | -1.6% | -3.4% |
| Exports - Y/Y | 13.9% | 10.5% | 7.3% |
Highlights
New Zealand's merchandise trade deficit widened from NZ$636 million in December to NZ$1,954 million in Janaury. Exports and imports both rebounded on the month after previous declines.
Exports rose 5.1 percent on the month in January after dropping 3.4 percent in December with year-over-year growth picking up from 7.3 percent to 13.9 percent. Exports of dairy products and forestry products rose strongly, offset by year-over-year declines in meat and fruit exports. Exports to Australia, the United States, Japan, and the European Union continued to rise at a solid pace, while exports to China also picked up after three months of weakness.
Imports fell 10.9 percent on the month in January after falling 11.1 percent in December, while year-over-year growth picked up sharply from 1.3 percent to 25.6 percent. This surge in year-over-year growth was largely driven by an increase of 173.3 percent in imports of petroleum and products. New Zealand closed down its sole domestic oil refinery in April 2022, and so its imports of refined fuels are now much larger than they were before this closure. The impact this has on year-over-year growth rates will dissipate after April. Imports rose on the year from most major trading partners, with the exception of Japan.
Exports rose 5.1 percent on the month in January after dropping 3.4 percent in December with year-over-year growth picking up from 7.3 percent to 13.9 percent. Exports of dairy products and forestry products rose strongly, offset by year-over-year declines in meat and fruit exports. Exports to Australia, the United States, Japan, and the European Union continued to rise at a solid pace, while exports to China also picked up after three months of weakness.
Imports fell 10.9 percent on the month in January after falling 11.1 percent in December, while year-over-year growth picked up sharply from 1.3 percent to 25.6 percent. This surge in year-over-year growth was largely driven by an increase of 173.3 percent in imports of petroleum and products. New Zealand closed down its sole domestic oil refinery in April 2022, and so its imports of refined fuels are now much larger than they were before this closure. The impact this has on year-over-year growth rates will dissipate after April. Imports rose on the year from most major trading partners, with the exception of Japan.
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.
