Current Account Preview - September Quarter 1999

Published: Wed 15 Dec 1999 10:41 AM
Data Flash (New Zealand) - Preview
NZ Current Account Preview - September Quarter 1999
Key Points
Release date:::::::::::::::: 21 December, 10.45am (NZT)
DB forecast:::::::::::::::::::Current account (ex migr. transfers)
:::::::::::::::::::::::::::::::::($NZ): -$3.0bn qtr.; -$6.9bn ann.
Forecast risk:::::::::::::::: Balanced risk assessment
Market expectations (avg):::::Quarterly current account ($NZ):
:::::::::::::::::::::::::::::::::-$2.7bn qtr.; Range: -3.2$bn/-2.3$bn
::::::::::::::::::::::::::::::Annual current account ($NZ):
:::::::::::::::::::::::::::::::::-$6.8bn ann.; Range: -$7.2bn/-$6.3bn
Previous release (Jun qtr)::::Quarterly current account ($NZ): -$2.0bn qtr.
::::::::::::::::::::::::::::::Annual current account ($NZ): -$6.3bn ann.
Current Account (year ended)::::::::::::::::::Dec98::::Mar99::::Jun99::::Sep99(f)
Merchandise Exports:::::::::: 22,909:::22,994:::23,229:::23,396
Merchandise Imports:::::::::: 21,181:::21,531:::22,174:::23,044
Trade Balance::::::::::::::::::1,730::::1,485::::1,056::::: 352
Services Exports:::::::::::::::6,954::::7,437::::7,614::::7,661
Services Imports:::::::::::::::8,475::::8,657::::8,571::::8,477
Services Balance::::::::::::::-1,521:::-1,220:::::-957:::::-816
Total Investment Credits:::::::::812::::: 314::::: -16::::: 72
Total Investment Debits::::::::6,621::::6,707::::6,942::::7,143
Investment Income Balance:::::-5,809:::-6,393:::-6,958:::-7,071
Transfer Balance::::::::::::::: 475::::: 347::::: 510::::: 647
Current Account Balance::::: -5,125:::-5,801:::-6,349:::-6,888
Balance (ex. migr. transfers) -4,978:::-5,696:::-6,290:::-6,880
:::% of nominal GDP:::::::::: -5.0:::::-5.8:::::-6.3:::::-6.7
Source: DB Global Markets Research, Statistics NZ
In line with average market expectations, we project the annual current account deficit to widen from 6.3% to 6.7% of GDP over the September quarter.:::While we forecast some improvement in the annual services balance (driven by continuing strong tourism growth), this is expected to be more than offset by a widening in the investment income deficit and a sharp deterioration in the merchandise trade balance on the back of recent strong import growth.
Looking further ahead, the current account deficit is forecast to deteriorate sharply to 7.7% of GDP over the December quarter, as the importation of a naval frigate (accounting for around 0.5 percentage points of the deficit) impacts on the current account balance. Thereafter, we expect only a gradual improvement in the current account, with the deficit remaining above 6% over the next two years.
While the trade balance is likely to improve on the back of stronger exports and a favourable trend in the terms of trade, the widening investment income deficit will provide a partial offset. The investment debts are expected to rise faster than nominal GDP, due to rising world interest rates and a recovery in the profitability of foreign-owned corporates in New Zealand.
The structural current account problem is expected to lead to a Standard & Poors credit rating downgrade in early 2000 and limit the medium-to-long-term performance of the NZD.
This, along with an extensive range of other publications, is available on our web site
In order to read our research you will require the Adobe Acrobat Reader which can be obtained from their website for free.
For answers to your EMU questions, check Deutsche Bank's EMU web site or email our helpline

Next in Business, Science, and Tech

KiwiRail strike notices withdrawn following new offer
By: Rail And Maritime Transport Union
Stress Tests Show Strengthening Bank Resilience
By: Reserve Bank
Building Activity Down In September Quarter
By: Statistics New Zealand
Deputy Governor Reflects On Time At RBNZ
By: Reserve Bank
Data Reveals ICT Expenditure Key To Small Business Sales Growth
By: Xero
Fonterra Lifts Forecast Farmgate Milk Price Range And Revises Earnings Guidance At First Quarter Update
By: Fonterra
Canterbury Museum: New Research - Bald Haast's Eagle Feasted On Moa Guts
By: Canterbury Museum
View as: DESKTOP | MOBILE © Scoop Media