NZD drops with March 2008 quarter current account announcement
26 June 2008
For the March 2008 quarter the seasonally adjusted current account deficit was $3.527 billion, $0.41 billion larger than the December 2007 quarter deficit of $3.117 billion. In actual dollar terms, this was $2.155 billion compared with expectations of $1.66 billion.
For the year ended March 2008, the current account deficit was $13.787 billion (7.8% of GDP), compared with $13.837 billion (7.9% of GDP) for the year ended December 2007, and $13.521 billion (8.2% of GDP) for the year ended March 2007.
The increase in the deficit this quarter can be attributed to a widening of the investment income deficit and an increase in imports of goods. The increase was partially offset by a rise in exports of goods.
The investment income deficit grew by $315 million this quarter. This growth was due to a $346 million fall in income earned from New Zealand investment abroad, which was slightly offset by a $31 million fall in income earned by foreign investors in New Zealand.
The New Zealand dollar dropped slightly in response.