Views differ on trade figures

Press, 27 September 1986, Page 3

Views differ on trade figures

By

MARTIN FREETH

in Wellington

Import and export estimates for August point to an improvement in New Zealand’s balance-of-payments deficit but the Opposition claimed yesterday that it could still be at a record high. The Statistics Department estimates that merchandise exports were $901.4 million, while imports were down to $870.9 million. That indicates that August will be the fourth successive month of trade surpluses. The balance-of-pay-ments current account deficit has apparently improved since March, largely because of the trade surpluses. The department estimates the June quarter deficit at $375 million, 15 per cent lower than the corresponding quarter of 1985.

Over the 12 months to June, the deficit is estimated at $2BBO million, an improvement on the record level of $2948 million in the year to March.

However, National’s spokesmen on finance and marketing, Mr George Gair and Dr Lockwood Smith, predicted the June year estimate could rise on revision.

They point out that it is only a first estimate and is higher than the equivalent figure for the year to March. The latter was revised up $7B million after initially being put at $2870 million. Dr Smith predicted the deficit could remain

under pressure from an unfavourable balance on invisibles, which, he said, reached the highest quarterly deficit in the June quarter. The Statistics Department puts that deficit at $833 million, double the level of the June quarter last year. A deterioration in the balance of invisibles, reflecting largely the payment of interest on foreign investment, has partly offset the recent trade surpluses.

Dr Smith said the deterioration continued in July, which the department estimates to have produced a $354 million deficit, the highest for a single month. He accused the Minister of Finance, Mr Douglas, of being blatantly incorrect with earlier predictions of improvement in the balance-of-payments deficit.

Mr Douglas should look for ways to boost New Zealand’s export earnings and reduce their ratio to debt servicing costs, Dr Smith said.

Surpluses in the merchandise trade balance have reflected mainly falling imports as domestic economic activity has slowed down. The estimate for imports in August is 13.6 per cent lower than those in August last year, while exports are only 2.8 per cent higher. Significant commodities imported during last month were boilers, machinery and vehicles. Japan was the largest source.

Meat and edible offal made up almost a third of the value of exports and dairy produce and fish were other significant earners. The United States was the largest single market.