| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$-323M | NZ$-1,234M | NZ$-1,250M |
| Imports - M/M | -4.5% | 4.1% | 3.7% |
| Imports - Y/Y | -12.5% | -15.1% | -15.5% |
| Exports - M/M | -4.1% | 4.5% | 3.9% |
| Exports - Y/Y | -8.7% | -5.3% | -6.1% |
Highlights
New Zealand's merchandise trade deficit narrowed from a revised NZ$1,250 million in November to NZ$323 million in December. Both exports and imports declined on the month after increasing previously.
Exports fell 4.1 percent on the month in December after an increase of 3.9 percent in November and dropped 8.7 percent on the year after a previous decline of 6.1 percent. Weakness in year-over-year growth reflects a big decline in dairy exports and a small decline in exports of forestry products, partly offset by year-over-year increases in exports of meat, fruit, and some manufactured goods. Exports to most major trading partners fell on the year, though the decline in exports to Australia was modest.
Imports fell 4.5 percent on the month in December after advancing 3.7 percent in November and fell 12.5 percent on the year after a previous decline of 15.5 percent. Petroleum imports more than doubled on the year, up 114.9 percent, but most other major categories recorded year-over-year declines. Imports also fell on the year from most major trading partners.
Exports fell 4.1 percent on the month in December after an increase of 3.9 percent in November and dropped 8.7 percent on the year after a previous decline of 6.1 percent. Weakness in year-over-year growth reflects a big decline in dairy exports and a small decline in exports of forestry products, partly offset by year-over-year increases in exports of meat, fruit, and some manufactured goods. Exports to most major trading partners fell on the year, though the decline in exports to Australia was modest.
Imports fell 4.5 percent on the month in December after advancing 3.7 percent in November and fell 12.5 percent on the year after a previous decline of 15.5 percent. Petroleum imports more than doubled on the year, up 114.9 percent, but most other major categories recorded year-over-year declines. Imports also fell on the year from most major trading partners.
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.
