Balance of payments improves

Press, 9 December 1983, Page 1

Balance of payments improves

New Zealand’s balance of payments has enjoyed the biggest annual improvement on record, the balance on current account for the year ended September 30 improving $823 million to a $1429 million deficit.

The balance-of-payments statistics cover all New Zealand’s transactions with the rest of the world. The merchandise trade balance for the year showed a surplus of $459 million, compared with a deficit of $457 million in the year ended September 30, 1982, the Statistics Department said.

The main cause of the decreased deficit was an increase of 12.2 per cent in exports of merchandise and only a 1 per cent decrease in merchandise imports. The previous record improvement was $462 million, from a deficit of $1376 million to $914 million, in the year ended June 30, 1976.

However, the Statistics Department said that an analysis of data for the latest quarter showed a trend reversal in which imports increased 11.6 per cent

— a warning that the improvement may be only temporary. The latest figures agree with the prediction of the Institute of Economic Research in its latest Quarterly Predictions — reported on page 11 of this issue — of a balance-of-payments deficit of $l3BO million for the year to March next.

On figures for the quarter ended September 30, the Statistics Department reports that the balance on current account was a deficit of $662 million, according to provisional statistics, compared with a deficit of $823 million for the same quarter last year. Government borrowing was $469 million, compared with $ll4l million, and Government loan repayments were $46 million, compared with $557 million. Foreign exchange reserves at the end of September were $1320 million, which represented 18.1 per cent of annual merchandise imports, compared with 10.3 per cent a year earlier — also a substantial improvement.