N.Z. Annual Trade Deficit Narrows to NZ$5.16 Billion

By Tracy Withers

Jan. 7 (Bloomberg) -- New Zealand’s annual trade deficit unexpectedly narrowed in November as a domestic recession curbed demand for imports.

The gap narrowed to NZ$5.16 billion ($3.1 billion) in the 12 months ended Nov. 30 from NZ$5.27 billion in the year through October, Statistics New Zealand said in Wellington today. The median estimate in a Bloomberg survey of five analysts was for a NZ$5.49 billion shortfall.

New Zealand’s economy was in a recession last year as a housing slump and the global financial crisis curbed spending on imported cars and computers. Consumer spending on debit and credit cards fell by the most in almost three years in November, according to a government report this week.

“Demand for imports will remain subdued as domestic demand flags amid deteriorating housing and labor-market conditions,” said Helen Kevans, an economist at JPMorgan Chase & Co. in Sydney.

New Zealand’s dollar bought 59.72 U.S. cents at 4:05 p.m. in Wellington from 59.77 cents immediately before the report.

Smiths City Group, a Christchurch-based furniture and appliance retailer, last month said sales fell in November amid a slump in consumer confidence.

Imports rose 5.2 percent in November from a year earlier to NZ$4.21 billion, the slowest annual gain since January, the statistics agency said.

Cars, Petroleum

Car imports plunged 52 percent from a year earlier, the agency said. Petroleum and jet fuel imports also declined.

The figures aren’t adjusted for inflation and reflect falling prices for imports as well as actual shipments.

Crude oil imports increased because of higher volumes. The price paid by oil importers fell 29 percent from October after global crude prices dropped to less than $50 barrel for the first time since May 2005 on Nov. 20.

Imports of fertilizer and other chemicals rose amid an increase in prices, the agency said.

Exports gained 9.4 percent in November from a year earlier to NZ$3.69 billion.

Sales of milk powder, butter and cheese, which make up almost one-fifth of overseas shipments, rose 10 percent in November from a year earlier.

Oil Exports

The value of crude oil sales fell 60 percent and aluminum exports also declined.

“Weak global demand and falling commodity prices will mean that export growth will moderate,” said Kevans.

The U.S., Japanese, U.K. and euro-area economies will all shrink in 2009, the Organization for Economic Cooperation and Development said last month.

Prices of butter, meat and other commodities dropped 7.4 percent in December from November, extending their decline last year to 25 percent, according to an index published today by ANZ National Bank Ltd.

Economists monitor the rolling, 12-month trade balance because of volatility in the month-on-month figures, which aren’t seasonally adjusted.

In November, there was a NZ$520 million trade deficit compared with a NZ$628 million gap a year earlier. Economists expected a NZ$775 million monthly deficit.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net.