N.Z.’s deficit for the year was $30 million

Press, Volume CXIV, Issue 33520, 29 April 1974, Page 14

N.Z.’s deficit for the year was $30 million

Sew Zealand Press Association»

WELLINGTON. April 28.

A current account deficit of $3O million was recorded for the year ended March, 1974, compared with a surplus of $285.9 million for the previous year, the Reserve Bank reports in a statement.

The reversal has resulted mainly from the very large increase in payments for imports which, together with a rise in the deficit on “invisible” transactions, has considerably exceeded the growth in export receipts, the bank says.

Import payments in' March. 1971. totalled a monthly record of 5176.2 million. Payments for! the year—Sl634.9 mil-; lion—were 38.2 per cent higher than for the j-ear to March. 1973. 1 The high level of payments < is expected to continue Mh the internal demand for im-i< ports remains strong. The j 1974-75 Import Licensing j Schedule recently released < by the Minister of Trade and , Industry has provided for a , higher value of imports into f New Zealand, and a signifi- ( cant increase is also expected j for delicensed imports. ; Export receipts for the j latest March year were $L813.7m — 9.7 per cent < higher than a year ago. The ’ largest gain was for meat,ii but improvements were also s

■recorded for wool, forest products, and manufactured exports. A decline in dairy receipts was more than compensated for by increases for ; other animal and primary ; products. There was a rise of 13.4 per cent or $208.8m in the over-all deficit on “invisible” transactions, but both receipts and payments grew significantly. Increased receipts for transport, immigrant’s transfers, travel and interest and investment income accounted for most of the 26.6 per cent rise in "invisible” receipts, while travel, fares, and interest and investment income were f he ma n items responsible for a 21.9 per cent growth in “invisible” pavments. The capital account recorded a net outflow of $69.8m in contrast to the net inflow of $48.9m for the previous vear. The net outflow

of $69.4m on official capital transactions was $9.7m higher than the outflow recorded last year and resulted from a higher level of official overseas debt repayment, notably maturing London loans .totalling $42.8m. In balance

Private capital was almost in balance compared with a net inflow of $108.7m a year earlier — the result of both a lower level of private receipts and higher private payments.

The acquisition by New Zealanders of assets previously held by overseas interests, together with the refinancing in New Zealand of private overseas debt at lower rates of interest, accounted for most of the increase in private capital payments.

At the end of March, 1974, official overseas reserves totalled $779.5m, or $137.7m lower than a year ago.

During the financial year adjustments totalling $151.5m were made to the New Zealand currency book values of official overseas reserves required to take account of exchange-rate fluctuations.

After revaluation of the New Zealand dollar in September, 1973, an immediate downward adjustment of 590.2 m was made to the New Zealand book value of reserves and to the remaind'-r before the end of the financial year. These adjustments have not affected the purchasing power of the overseas reserves in foreign currencies. Details of overseas exchange transactions in the last three years are as follows:—

RECEIPTS Year ended March 1974 1973 1972 Sm $m Jm Exports 1814 1653 1333 Other current 415 327 246 CapitalGovt. borr. 2 31 107 Other official 1 Private 180 209 153 l.M.F. iS.D.R.S.) J9 !■ Total 2411 2220 1859 PAYMENTS Imports— Govt 64 69 62 Private 1571 1114 991 Other current— Govt 93 89 80 Private 526 423 351 CapitalGovt debt repayment 66 90 51 Other off. 6 — 5 Private 180 100 82 ■ - ■— Total 2511 1835 1622 BALANCES Trade + 179 1470 + 279 Invisibles -209 -184 -184 Current account -30 + 286 +95 Capital account -70 + 49 +122 l.M.F. + 19 Change in reserves -138 +287 +257 Details of New Zealand’s export receipts in the last three years are as follows:— Years ended March 1974 1973 1972 $m $m $m Butter . Ill 109 150 Cheese 57 75 65 Other dairy . 138 133 100 Meat . 600 548 440 Wool . 415 383 225 Other anima! prods 134 123 105 Forest products . 119 92 86 Other primary 75 61 56 Manufactures 156 123 100 Miscellaneous 9 6 6 —1 1 — Total: . 1814 1653 1333