| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$-976M | NZ$-323M | NZ$-368M |
| Imports - M/M | -4.0% | -4.5% | -5.3% |
| Imports - Y/Y | -20.2% | -12.5% | -13.1% |
| Exports - M/M | 4.1% | -4.1% | -5.0% |
| Exports - Y/Y | -7.1% | -8.7% | -10.0% |
Highlights
New Zealand's merchandise trade deficit widened from a revised NZ$368 million in December to NZ$976 million in January. Exports rose after a previous decline while imports fell at a less pronounced rate.
Exports rose 4.1 percent on the month in January after falling 5.0 percent in December and dropped 7.1 percent on the year after a previous decline of 10.0 percent. Weakness in headline year-over-year growth reflects declines in dairy and meat exports, partly offset by year-over-year increases in exports of forestry products, fruit, and some manufactured goods. Exports to most major trading partners fell on the year, with the European Union the main exception.
Imports fell 4.0 percent on the month in January after dropping 5.3 percent in December and fell 20.2 percent on the year after a previous decline of 13.1 percent. Petroleum imports fell 49.9 percent on the year, with imports of vehicles and mechanical machinery and equipment also recording year-over-year declines. Imports also fell on the year from most major trading partners with the exception of Japan.
Exports rose 4.1 percent on the month in January after falling 5.0 percent in December and dropped 7.1 percent on the year after a previous decline of 10.0 percent. Weakness in headline year-over-year growth reflects declines in dairy and meat exports, partly offset by year-over-year increases in exports of forestry products, fruit, and some manufactured goods. Exports to most major trading partners fell on the year, with the European Union the main exception.
Imports fell 4.0 percent on the month in January after dropping 5.3 percent in December and fell 20.2 percent on the year after a previous decline of 13.1 percent. Petroleum imports fell 49.9 percent on the year, with imports of vehicles and mechanical machinery and equipment also recording year-over-year declines. Imports also fell 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.
