World Economy

NZ Annual Deficit Narrows to $3.2b

NZ Annual Deficit Narrows to $3.2bNZ Annual Deficit Narrows to $3.2b

New Zealand has recorded a narrower annual trade deficit. Official figures show a shortfall of $3.2 billion in 2016, compared with a $3.5 billion deficit in the previous year.

Exports edged down for a second successive year, to $48.4 billion, due in part to lower prices for dairy, beef and lamb. That offset higher sales of forest products, fruit and fish. Meat exports fell 13% to $5.9 billion, Radio New Zealand reported.

“The large fall in meat exports for 2016 reflects a decline from the record meat season in 2015 for both value and quantity,” Statistics New Zealand international statistics senior manager Nicola Growden said. “The 2016 meat exports have returned to levels similar to those seen in 2014.”

Dairy exports eased 3% to $11.2 billion, as a record high three million tons of milk powder, butter, and cheese exported failed to offset lower global dairy prices.

The quantity of milk powder, butter, and cheese has been rising since 2013 and is now 14% higher than it was then. China made up 25% of the quantity exported in 2016, slightly up from 23% in 2015.

Lower crude oil prices did help limit the import bill though, which eased 2% to $51.6 billion. Oil and petrol fell 16% to $4.4 billion.

Statistics New Zealand said the value of crude oil had been falling for the past four years, and was now 55% lower than the $5.7 billion recorded in 2012. The amount of crude oil import rose 2.3% in 2016, and has been increasing for the past two years.

The figures also emphasize New Zealand’s trade ties with Asia. Exports rose 4% to $21.9 billion last year, four times greater than sales to Europe at $5.4 billion, with the United States at $5.3 billion.

China remained the country’s top trade partner, with exports up 9% to $9.4 billion and imports flat at $10.3 billion, followed by Australia.

For December, New Zealand posted its smallest monthly trade deficit in six months at $41 million, as the recovery in dairy prices helped to offset falls in meat and oil earnings. Dairy exports rose 8% to $1.5 billion.

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