"The December balance of payments figures are consistent with a strong export performance and good corporate profits in New Zealand," Finance Minister Michael Cullen said today.

"The goods surplus rose $320 million over the quarter reflecting an $802 million increase in exports against a much more modest $482 million increase in imports.

"However this was off-set by an increase in the net investment income deficit.

"The result looks bad on the BoP figure but actually reflects the fact that New Zealand is still in recovery mode while other economies are beginning to slow down.

"Overseas investors income from their New Zealand investments rose $374 million while New Zealand investors income from their overseas investments dropped $134 million - reflecting the relative strength of the New Zealand economy, particularly against Australia," Dr Cullen said.

He welcomed the drop in the annual current account deficit but noted that most of the $1,016 million improvement was due to the Te Mana frigate dropping out of the data.

Ends

© Scoop Media