TRADE AND EXCHANGE

New Zealand Herald, Volume LXX, Issue 21403, 30 January 1933, Page 6

TRADE AND EXCHANGE

A favourable balance of about £11,000,000 in sterling funds is shown by the returns of the Dominion's overseas trade in 1932, transactions in December having added about £940,000 to the export surplus, which is over £3,000,000 greater than that for 1931. There was an apparent increase in exports of £1,813,000, but nearly the whole of this can be attributed to exceptional shipments of specie, amounting in 11 months to £1,301,000, against only £121,000 in the previous year. If this item is excluded, the increase in exports is reduced to £500,000 sterling—a modest figure, at first glance, but highly significant in view of the circumstances. In spite of the decline in prices during the year production has increased sufficiently to maintain the total value of exports. That is a substantial achievement, for which few parallels will be found in international trade statistics. The increase in the visible trade balance comprises the actual increase in export values, the unusual shipments of specie and a further reduction in imports. Exact calculation of the increment to Zealand funds abroad is not possible, but the major items are known. To the trade surplus of £11,000,000 were added the proceeds of the £5,000,000 loan in London: out of the £16,000,000 had to be paid £4,000,000 for redemption of Treasury bills and £7,500,000 on account of external debt charges (reduced by the suspension of war debt obligations), leaving a surplus of £4.500,000. The estimates are particularly interesting as an indication of the exchange position during 1933, and the consequent dimensions of the burden that will be thrown upon the Budget in the effort to sustain the fixed rate of exchange. Exports will probably be maintained at £33,000,000 —excluding the possibility of gold shipments on which interest at £7,500,000 will be the first charge. Imports will fall below £23,000,000 to the extent of three or four millions, according to the estimate of customs revenue, so that the surplus will be probably £5,000,000 or £6,000,000. The importance of the actual amount is evident since every million of surplus funds adds £250,000 to the prospective Budget deficit.