External deficit falls $360M

Press, 27 July 1976, Page 6

External deficit falls $360M

| New Zealand's external de-i [Licit was reduced from $1067! Imillion in the year ended ! ijune, 1975, to $704 million] ;in 1975-76. The overseas exchange ’transactions for the year were released by the Reserve Bank, through the Press As- 1 sociation. They show that the current account deficit of $704 million, though sharply 1 reduced, was still higher than ; the 5334 M of 1973-74. I Export receipts totalled i, 152491 M, an annual increase]; of 50 per cent, and total im-i, port payments, $2727M rose!, 15 per cent. The deficit on “invisible”'i (non-merchandise) trans- i actions has continued to widen during most of the I year to S46BM at the end of ; June. This expansion has been I largely caused by higher pay- 1 ments” for official and private • sector debt interest and i freight on exports. Rises in 1 other principal payments, especially travel, reflect last : August’s devaluation, and 1 were compensated for bv im- i Iprovements in transport and • itravel income.

■ There was a net capital! inflow of $599M (including! 11.M.F.) during the year, com-! ]prising a net official inflow! of S4I6M and net private rejceipts of SIB3M. Of the net official inflow, $357M took place between July and December, 1975, and SS9M in 1976. Overseas exchange trans-1 actions in June resulted in a current account deficit of S6SM after lower deficits in; I recent months. A record level' [of import payments in the; ;latest month. $259M, was the! (main reason for the increased ! deficit. The latest deficit was, how-] 'ever, below last June's figure] of SS2M.

A net capital inflow of SI3M in June resulted from a private capital inflow of S2IM, which was partly offset by a net official outflow. Official capital transactions included net proceeds (S49M) of a Euro-dollar loan and loan repayments, mainly to a consortium of international banks. Private capita! receipts included a further drawing under the Maui loan agreement.

Details of export receipts in the last three years are as follows: EXPORTS Year ended June 1974 1975 1976 $M $M SM Meat .. 565 485 674 Wool .. 371 286 512 Rutter .. 109 113 186 Cheese .. 58 35 87 Milk powders .. 91 116 117 Other dairy produets .. 56 52 84 other animal products .. 127 127 180 Forest products .. 120 146 198 Other primary products 70 75 97 Manufactured exports .. 171 208 344 Miscellaneous 14 12 Total Exports: .. 1747 1657 2491 Details of overseas exchange transactions in the last three years are as follows: RECEIPTS Year ended June 1974 1975 1976 $M $M Current items— Exports .. 1748 1658 2491 Other .. 424 493 617 Capita] items— 393 Government bor. 497 Other off. 14 93 191 Private .. 189 379 381 I.M.F. .. ,. .. — 100 250 Total PAYMENTS .. 2376 3220 4323 Current items— Imports— 173 Government .. 69 147 Private Other— .. .. 1780 2228 2554 Government .. 96 147 203 Private .. 561 696 882 Capital items — Government dept rep mt 68 32 237 Other off. 7 181 Private .. .190 103 199 Total Balances— .. 2771 3358 4429 Trade .. -101 -717 -236 Invis .. -233 -350 -468 Current -334 -1067 -704 Capital . -61 •828 + 348 I.M.F — f 100 +250