| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$-963M | NZ$699M | NZ$585M |
| Imports - M/M | 8.6% | -11.3% | -12.0% |
| Imports - Y/Y | 8.5% | -13.0% | -13.4% |
| Exports - M/M | 2.4% | -2.3% | -3.7% |
| Exports - Y/Y | 14.3% | -0.1% | -2.3% |
Highlights
New Zealand's merchandise trade balance shifted from a surplus of NZ$585 million in June to a deficit of NZ$963 million in July.
Exports rose 2.4 percent on the month in July after falling 3.7 percent in June and advanced 14.3 percent on the year after a previous decline of 2.3 percent. Exports of dairy products, forestry products and fruit recorded solid year-over-year increases, offset by a fall in meat exports. Exports rose on the year to all major trading partners, including Australia, Japan, China, the European Union and the United States.
Imports rose 8.6 percent on the month in July, rebounding from a fall of 12.0 percent in June, and advanced 8.5 percent on the year after falling 13.4 percent previously. Petroleum imports rose sharply on the year after a previous decline, offset by further weakness in imports of vehicles and only a small increase in mechanical machinery and equipment. Imports from Australia and China rose on the year, offset by declines in imports from the European Union, Japan, and the United States.
Exports rose 2.4 percent on the month in July after falling 3.7 percent in June and advanced 14.3 percent on the year after a previous decline of 2.3 percent. Exports of dairy products, forestry products and fruit recorded solid year-over-year increases, offset by a fall in meat exports. Exports rose on the year to all major trading partners, including Australia, Japan, China, the European Union and the United States.
Imports rose 8.6 percent on the month in July, rebounding from a fall of 12.0 percent in June, and advanced 8.5 percent on the year after falling 13.4 percent previously. Petroleum imports rose sharply on the year after a previous decline, offset by further weakness in imports of vehicles and only a small increase in mechanical machinery and equipment. Imports from Australia and China rose on the year, offset by declines in imports from the European Union, Japan, and the United States.
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.
