Import payments soar to record

Press, 17 December 1976, Page 4

Import payments soar to record

PA Wellington New Zealand recorded a current account deficit of SS4M on overseas transactions for November, according to the latest statistics released yesterday. Import payments were the highest recorded in a single month, but the Reserve Bank predicted an improvement in the deficit next year. The table of overseas exchange transactions for November released by the bank shows that current payments exceeded current receipts by $54M—-much higher than the October deficit but well down on the SB9M deficit for September.

The Reserve Bank said the October deficit of SIOM was “unusually low.” Last month’s export receipts totalled $247M, but the bank said that the import payments of S27IM were “the highest on record for a single month.” A net capital outflow of S46M was caused largely by a Government loan repayment of $43 M to an international bank consortium. The loan is available for redrawing if required. The bank said that the November 29 devaluation of the New Zealand dollar had little effect, on the November figures. The November figures show a three-monthly current account deficit of SIS4M compared with a deficit of $263M for the three months ended November last year. The 1976 deficit comprised an adverse trade balance of S3IM and net invisible payments of SI23M.

The 45 per cent increase in export earnings in the 1976 period was contributed to by all export commodities—the most notable improvements being meat (SI79M in the three months), wool (SIISM)

and manufactured exports (SI33M). Despite the record level of import payments recorded last month, the total payments for the three month period — $754M — was down on the previous three monthly period although 8 per cent higher than the three months ended November, 1975, the bank said. The deficit on invisibles of SI32M for the latest period was well up on the S64M for the period last year—reflecting much higher- transport costs and official debt servicing costs. The net capital inflow of SSOM for the period included official borrowing of S2OM and private inflow of S3OM. Analysing the 12 months to the end of November, the Reserve Bank said that a gradual improvement in the current account balance throughout 1976 was indicated by the deficit of $629M for the period—a deficit which compared favourably with the $995M deficit for the year ended November. 1975.

This improvement had resulted from the marked improvement in the trade deficit from S6I2M to ss3M—offset by the deteriorating invisible deficit which increased from S3B3M to $576M. Export earnings for the 1976 period had increased by 56 per cent—mainly on wool, meat, and manufactured exports—but import payments had risen bv 19 per cent. The net capital inflow of S4ISM had included International Monetary Fund transactions and compared with an inflow of $923M last year.

At the end of November, official overseas reserves totalled $554M.

"The November import payments figures show how misleading the October statistics were,” the Opposition spokesman on finance (Mr R. J. Tizard) said. "Imports are showing a considerable upward movement and at S27IM for November are the highest for a single month. In the year ended November, 1976, exports were more than SIOOOM up on the previous year, but the countrv is still running a large deficit because imports have not been controlled.

"In opposition, National claimed they had the remedies for the trade imbalance So far, they have failed and are allowing our export to be frittered away while they

go on talking,’’ Mr Tizard said. New Zealand has dropped one place to seventh in the inflation table of the 24-< nation Organisation for Economic Co-operation and Development—thanks to rising prices in Italy, N.Z.P.A. reports from London. With an annual inflation rate of 17.2 per cent in the 12 months to last October, New Zealand, has the seventh worst figure in the 0.E.C.D., according to latest statistics published bv the Paris-based organisation.