Deficit In Current Account Up $20m

Press, Volume CVIII, Issue 31597, 7 February 1968, Page 24

Deficit In Current Account Up $20m

In its overseas transactions New Zealand had a deficit of $107.2m in the current account in the year ending December, 1967, compared with a deficit of $86.6m in the previous year.

Export receipts exceeded import payments by $74.3m, but there was a deficit of $181.5m on invisible transactions, the Reserve Bank announced last night.

However, a net capital in-

flow of $147.6m, $76.1m higher than in 1966, gave an over-all surplus of $40.4m, compared with over-all delicts of $15.1m and $24.4m in the two previous years. According to the Press Association, the bank statement says that compared with the year ended December, 1966, export receipts were down $90.5m with fails in wool (down $106.5m) and meat industry by-products (down $16.5m), mainly sheepskins and pelts. However, increases were recorded for all other exports, the largest being for meat (up $U4.4m). Payments for imports fell sharply during the year, and the total was $81.4m below that for 1966. Reductions were recorded in all months except February when compared with the same months of 1966. LATER IN YEAR

The downturn was particularly marked in the second half of the year when payments for imports fell $54.4m, compared with the same period a year earlier. The falling trend is a reflection of the reduction in business activity and the gradual effectiveness of the Government’s delationary measures applied earlier- in the year. Contrary to expectations, the effect of the dock strike in Britain in September, October and November was not very great. The $81.4m fall in import payments was insufficient to offset the larger fall in export receipts and consequently the surplus on trade transactions was $73.3m, s9m less than that for the previous year. However, from July to December, 1967, there was a trade surplus of $22.1m which compares favourably with the deficits of $37.1m and $2.9m for the same periods in 1965 and 1966 respectively. Invisible receipts rose s2.Bm

to $93.4m and invisible payments rose $14.3m to $274.9m. There was a $11.6m rise in the deficit on invisible transactions to $181.5m. The previous year the deficit rose $24.7m. However, there was a levelling of the deficit on invisible transactions during the latter part of 1967, so that for the last six months of the year the deficit was only so.lm more than that recorded for the same period in 1966. The net capital inflow for the year was $147.6m $76.1m higher than in 1966 Net official borrowing totalled $143.1m (including $66.8m from the Internationa' Monetary Fund) and there was a net private capital inflow of $16.4m, compared with only so.2m in 1966.