| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | NZ$1,235M | NZ$1,426M | NZ$1,285M |
| Imports - M/M | -1.7% | -0.9% | -1.0% |
| Imports - Y/Y | -7.2% | 1.8% | 1.7% |
| Exports - M/M | -5.5% | 4.2% | 2.8% |
| Exports - Y/Y | 9.7% | 24.6% | 22.3% |
Highlights
New Zealand's merchandise trade surplus narrowed from a revised NZ$1,285 million in April to NZ$1,235million in May. This compares with a surplus of NZ$59 million in May 2024. Exports and imports both fell sharply on the month and recorded weaker year-over-year growth in May, suggesting that the escalation in global trade tensions has impacted trade flows.
Exports fell 5.5 percent on the month in May after increasing 2.8 percent in April, with year-over-year growth slowing from 22.3 percent to 9.7 percent. Exports of fruit, dairy products, forestry products, and meat all recorded solid increases on the year. Exports to the United States and Japan fell on the year, offset by increases in exports to China, Australia, and the European Union.
Imports fell 1.7 percent on the month in May after dropping 1.0 percent in April and fell 7.2 percent on the year after increasing 1.7 percent previously. Imports of petroleum and motor vehicles fell sharply on the year, offset by increases in imports of electrical machinery and equipment. Weakness in imports was broad-based across major trading partners.
Exports fell 5.5 percent on the month in May after increasing 2.8 percent in April, with year-over-year growth slowing from 22.3 percent to 9.7 percent. Exports of fruit, dairy products, forestry products, and meat all recorded solid increases on the year. Exports to the United States and Japan fell on the year, offset by increases in exports to China, Australia, and the European Union.
Imports fell 1.7 percent on the month in May after dropping 1.0 percent in April and fell 7.2 percent on the year after increasing 1.7 percent previously. Imports of petroleum and motor vehicles fell sharply on the year, offset by increases in imports of electrical machinery and equipment. Weakness in imports was broad-based across 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.
