| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$-218M | NZ$-976M | NZ$-1,089M |
| Imports - M/M | 15.2% | -4.0% | -4.7% |
| Imports - Y/Y | 3.3% | -20.2% | |
| Exports - M/M | 11.3% | 4.1% | 2.8% |
| Exports - Y/Y | 16.2% | -7.1% | -9.3% |
Highlights
New Zealand's merchandise trade deficit narrowed from a revised NZ$1,089 million in January to NZ$218 million in February. This is the smallest monthly deficit since June 2023. Exports rose at a faster pace while imports rebounded after a previous decline.
Exports rose 11.3 percent on the month in February after advancing 2.8 percent in January and surged 16.2 percent on the year after a previous decline of 9.3 percent. This sharp rebound in headline year-over-year growth was broad-based across major categories, with exports of dairy products, meat, forestry products, and fruit all recording strong increases. Solid increases were also recorded for all major trading partners with the exception of Japan.
Imports rose 15.2 percent on the month in January after dropping 4.7 percent in January and increased 3.3 percent on the year after a previous decline of 20.2 percent. Petroleum imports rose on the year after a previous decline, offset by further weakness in imports of vehicles and mechanical machinery and equipment. Growth was mixed across major trading partners, with increases on the year in imports from China, Japan, and Australia offset by declines in imports from the United States and the European Union.
Exports rose 11.3 percent on the month in February after advancing 2.8 percent in January and surged 16.2 percent on the year after a previous decline of 9.3 percent. This sharp rebound in headline year-over-year growth was broad-based across major categories, with exports of dairy products, meat, forestry products, and fruit all recording strong increases. Solid increases were also recorded for all major trading partners with the exception of Japan.
Imports rose 15.2 percent on the month in January after dropping 4.7 percent in January and increased 3.3 percent on the year after a previous decline of 20.2 percent. Petroleum imports rose on the year after a previous decline, offset by further weakness in imports of vehicles and mechanical machinery and equipment. Growth was mixed across major trading partners, with increases on the year in imports from China, Japan, and Australia offset by declines in imports from the United States and the European Union.
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.
