$471 million Trade Deficit for July

Trade Deficit for July

The estimated trade balance for July 2003 is a deficit of $471 million, according to Statistics New Zealand. This has resulted from provisional merchandise imports of $2,781 million and estimated merchandise exports of $2,310 million for the month.

The imports value is 1.6 percent lower than July 2002, while the exports value is 9.4 percent lower for the same period. Following a turning point in February 2003, the imports trend has shown a small increase in recent months, while the export trend has been in decline since March 2002.

The estimated merchandise trade deficit for July 2003 is 20.4 percent of exports.

With the exception of July 1997, this is the largest July month deficit in the last 17 years. A trade deficit is normal for a July month, with the deficit ranging from 1.0 percent to 15.8 percent of exports over the last 17 years. The trade deficit in July 1997 was larger at 26.8 percent of exports; however, the frigate HMNZS Te Kaha was imported during this month. With the frigate excluded, the trade balance for July 1997 would have been a surplus of 5.1 percent of exports.

For the year ended July 2003, the provisional value of merchandise imports is $32,119 million, up 0.9 percent from the July 2002 year. The estimated value of merchandise exports for the same period is $29,002 million (down 9.7 percent), resulting in an estimated deficit of $3,117 million for the period. As a percentage of exports, this is the largest year ended July trade deficit since July 2000.

The New Zealand dollar was 14.3 percent higher in July 2003 than in July 2002, according to the trade weighted index. A higher exchange rate will generally cause a decrease in the price of imports when measured in New Zealand dollars.

The main contributors to the lower import value for the July 2003 month were vehicles, parts and accessories; aircraft and parts; and mechanical machinery and equipment. These were partly offset by higher values for ships, boats and floating structures; and fertilisers.

Updated and detailed merchandise export statistics will be released on 5 September 2003.

Brian Pink

Government Statistician

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