The seasonally adjusted current account deficit widened to $6.5 billion in the December 2021 quarter, from $4.7 billion in the September 2021 quarter, Stats NZ says.
The current account deficit was wider than the previous quarter mainly due to an increase in the value of goods and services imports, up $1.5 billion (6.7 percent) to $24.5 billion.
Goods and services exports increased at a slower rate, up $20 million to $20.3 billion.
Goods imports continue to climb
In the December 2021 quarter, compared with the September 2021 quarter, the seasonally adjusted goods deficit widened by $417 million to $2.3 billion.
Goods imports rose by $926 million (up 5.1 percent) to $19.0 billion.
"The value of imports has continued to grow in recent quarters due to strong ongoing domestic demand for imported goods, and rising prices and transport costs internationally," says institutional sectors senior manager Paul Pascoe.
In the December 2021 quarter, the value of New Zealand’s goods imports was $19.0 billion, compared with $12.5 billion in the June 2020 quarter.
While the demand for goods has been strong during the Covid-19 pandemic, production in some industries slowed globally, resulting in supply shortages and price increases for many goods. In the December 2021 quarter, the price of goods imports rose 3.8 per cent, while the volume of goods imported fell 0.9 per cent.
The rise in the value of goods imports was widespread across many items, including transport equipment, crude oil, and fertiliser.
In the December 2021 quarter, the value of seasonally adjusted goods exports rose by $509 million to $16.7 billion.
The rise was driven by an increase for milk powder, butter and cheese, mechanical machinery and equipment, and aluminium.
The rise in exports was partially offset by a fall in the export of logs.
Freight pushes up services imports
In the December 2021 quarter, New Zealand’s seasonally adjusted services deficit widened by $1.1 billion to $1.9 billion.
Services imports rose by $616 million to $5.4 billion, and services exports fell by $489 million to $3.6 billion.
In the December 2021 quarter, seasonally adjusted transport services imports rose by $196 million to $1.5 billion.
"The value of freight services has increased in part because higher demand for imported goods means more is coming into New Zealand, but also because freight costs have risen in recent quarters,” says Pascoe.
Since the June 2020 quarter, transport services imports have risen by $819 million to $1.5 billion. During this period, both sea and air transport services imports were mostly from the movement of freight rather than passengers.
In the December 2021 quarter, seasonally adjusted travel services exports fell by $319 million to $1.0 billion.
The value of travel services exports has remained at much lower levels since the March 2020 quarter, when border restrictions were introduced in response to Covid-19.
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