New Zealand Current Account Deficit NZ$0.8 Billion

(RTTNews) - New Zealand posted a seasonally adjusted current account deficit of NZ$0.8 billion in the fourth quarter of 2013, Statistics New Zealand said on Wednesday - marking the smallest deficit since the first quarter of 2010.

The headline figure beat forecasts for a shortfall of NZ$2.2 billion following the NZ$2.58 billion deficit in the third quarter.

An increase in the value of dairy product exports fueled the increase.

"New Zealand exported record levels of dairy products this quarter, which drove the balance on goods and services to its highest-ever surplus," balance of payments manager Jason Attewell said in a release accompanying the data.

However, an increase in New Zealand's investment income deficit partly offset the rise in goods exports, the bureau said. Foreign-owned companies in New Zealand earned their highest profits in four years, mostly due to higher profits earned by the corporate sector this quarter.

For all of 2013, New Zealand had a current account deficit of NZ$7.5 billion (3.4 percent of GDP), down from $8.9 billion (4.1 percent of GDP) in Q3.

The quarterly current account deficit was funded by a net inflow of foreign investment during the quarter. Overseas investors increased their holdings of debt securities issued by New Zealand's banking sector over this time, the bureau said.

Despite the net inflow of foreign investment in the latest quarter, New Zealand's net international liability position fell to NZ$147.6 billion (66.6 percent of GDP) in Q4 - versus a net international liability position of NZ$149.5 billion in Q3.

"Rising overseas share prices increased the value of New Zealand's overseas assets this quarter, while falling domestic share prices decreased the value of our overseas liabilities," Attewell said.