Balance of payments worsens

Press, 2 December 1987, Page 2

Balance of payments worsens

By

BRENDON BURNS,

political reporter

The country’s balance of payments, measuring what is eamt overseas against what is spent, continues to deteriorate. Furthermore, the Department of Statistics has confirmed Opposition claims that because it is unable to fully survey short-term private borrowing, the cost estimated for this may be considerably understated. Releasing the monthly balance of payments for October, the department said a slight deterioration in the balance-of-pay-ments deficit was emerging.

The current account balance for October was a deficit of $172 million, up $1 million on the previous month after seasonal adjustments are made and figures smoothed.

This balance is made up of two elements: merchandise trade and invisibles.

Merchandise trade — actual goods exported and imported — continued to

produce a surplus, up to $133 million in October from $BO million for the same month last year.

But invisibles — financial transactions, most particularly foreign debt — continued to grow. The invisibles deficit for October was $305 million, an increase on last October’s deficit of $251 million. The Statistics Department qualified its statement yesterday on its debt figures. It said in recent years there were suggestions of a large increase in New Zealand’s private shortterm borrowing overseas. The interest payments on this borrowing could only be “partially surveyed” by the department and may be “considerably understated.”

“If this is so, then the Statistics Department’s estimate on the current account deficit will be understated,” it said. The balance-of-pay-ments current account was at a deficit Of . $2355 million for the year to October, 1987.