New Zealand's merchandise trade balance shifted from a revised surplus of NZ$203 million in June to a deficit of NZ$578 million in July. This compares with a deficit of NZ$1,022 million in July 2024. Exports rebounded on the month but imports weakened in July.

Exports rose 2.9 on the month in July after falling 1.2 percent in June, with year-over-year growth picking up from 8.3 percent to 10.3 percent. Exports of fruit, dairy products and forestry products all recorded solid increases, while exports rose on the year to all major trading partners.

Imports fell 0.7 percent on the month in July, weakening sharply from an increase of 2.6 percent in May, while year-over-year growth slowed from 16.1 percent to 2.6 percent. Imports of mechanical machinery and equipment and motor vehicles rose on the year, offset by a fall in petroleum imports. Imports from Australia, China, the United States, the European Union, and Japan, all rose on the year, offset by wekaer imports from South Korea and Singapore.

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).

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.