Balance of Payments: December 2000 quarter
The current account deficit for the December 2000 quarter was $1.9 billion, Deputy Government Statistician Ian Ewing
said today. After adjusting for seasonal factors, the current account deficit increased by $342 million, following two
consecutive quarterly decreases. Gains by overseas investors from higher profits earned by New Zealand firms more than
offset gains from increased exports, causing the increase in the current account deficit.
Total income earned by overseas investors in New Zealand rose $374 million between the September and December 2000
quarters. Profits from foreign-owned New Zealand companies rose $411 million and were the major contributor to the
increase in income from foreign investment. Total income from New Zealand investment abroad fell $134 million over the
same period. The slowdown in the Australian economy appears to have affected the profits from New Zealand subsidiaries
abroad, with income from direct investment abroad by New Zealand companies falling $189 million between the September
and December 2000 quarters.
The seasonally adjusted goods surplus increased $320 million between the September and December 2000 quarters. The
increase in value has resulted from higher goods prices combined with increased export volumes. The value of seasonally
adjusted goods exports rose $802 million, more than offsetting a $482 million increase in the value of imports.
The seasonally adjusted services deficit increased $136 million between the September and December 2000 quarters. Growth
in the number of New Zealanders travelling abroad, combined with higher freight and port charges, have increased
expenditure on travel and transportation service imports by $162 million this quarter. This increase in imports more
than offset the $91 million increase in travel and transportation services exports over the same period.
The trend estimate for the current account balance shows an increased deficit in the December 2000 quarter. The income
and transfers balance has been the major contributor to this increase, despite the goods and services balance recording
surpluses. The income and transfers balance trend shows a deficit at a similar level to the March 1997 quarter. This is
the second consecutive quarterly increase for the income and transfers balance trend and follows a period of decreasing
deficits between the December 1999 and June 2000 quarters. The trend for the goods and services balance has been rising.
This has been driven by the rising value of the goods exports trend.
For the year ended December 2000, the current account balance recorded a $5,959 million deficit. This is $1,016 million
less than the September 2000 year deficit of $6,975 million. However, when the value of the frigate HMNZS Te Mana is
excluded, the decrease between the September and December 2000 years is $385 million.
Ian Ewing DEPUTY GOVERNMENT STATISTICIAN