New Zealand's Trade Balance Swung to Deficit in July

New Zealand reported a trade deficit for the first time in seven months in July as increased imports of vehicles and petroleum products offset gains in exports of milk powder, butter and cheese., Bloomberg 9/1/2010 10:49:41 AM

The deficit was NZ$186 million ($133 million) from a revised NZ$214 million in June, Statistics New Zealand said today in Wellington.

Slowing exports, which make up 30 percent of the economy, may curb New Zealand’s economic recovery as increasing unemployment and rising interest rates damp domestic spending.

New Zealand’s commodity-export prices fell for a second month in July, led by dairy, beef and lumber, according to an ANZ National Bank Ltd. index.

The monthly figures aren’t seasonally adjusted and New Zealand’s exports typically increase between February and May as milk, wool and meat production peaks.

The shortfall followed a NZ$178 million deficit a year earlier. As a result, the annual trade surplus was NZ$573 million.

Exports fell 5.9 percent from June to NZ$3.57 billion, today’s report showed.

From a year earlier, exports rose 12.4 percent. Export prices climbed 47 percent from July last year, according to the ANZ National index.

Exports to China increased 29.9 percent from a year earlier to NZ$389 million, today’s report showed. China now buys 10 percent of total annual exports and is New Zealand’s second- largest customer after Australia.

Imports advanced 4.9 percent from June to NZ$3.75 billion. From a year earlier, they gained 12 percent.

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