New Zealand's merchandise trade deficit widened from NZ$716 million in July to a deficit of NZ$1,185 million in August. This compares with a deficit of NZ$2,316 million in August 2024. Exports and imports both recorded stronger growth in August.

Exports rose 7.8 on the month in August after advancing 2.2 percent in July, with year-over-year growth accelerating from 7.8 percent to 22.8 percent. Exports of fruit, dairy products and forestry products all recorded strong increases, while exports rose on the year to all major trading partners with the exception ofJapan.

Imports rose 2.3 percent on the month in August, rebounding from a decline of 0.8 percent in July, but fell 0.4 percent on the year after a previous increase of 2.4 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, and Japan, all rose on the year, offset by weaker imports from South Korea, the European Union, and the United States.

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.