| Actual | Previous | Revised | |
| Balance | NZ$800M | NZ$1,920M | NZ$1,598M |
| Imports - M/M | 20.6% | -2.3% | -2.1% |
| Imports - Y/Y | 25.9% | 3.4% | 3.0% |
| Exports - M/M | 2.7% | 7.7% | 4.8% |
| Exports - Y/Y | 18.1% | 12.3% | 7.7% |
Highlights
New Zealand's merchandise trade surplus narrowed from NZ$1,598 million in April to NZ$800 million in May. Exports rose 2.7 percent on the month in May after increasing 4.8 percent in April, with year-over-year growth accelerating from 7.7 percent to 18.1 percent. Imports rose 20.6 percent on the month in May after dropping 2.1 percent in April, and rose 25.9 percent on the year after a previous increase of 3.0 percent.
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.