June BOP underscores strong economy

  • Steven Joyce

Better than expected balance of payments figures out this morning underscore the strength of both the services and goods sectors of the New Zealand economy, Finance Minister Steven Joyce says.

New Zealand's current account deficit narrowed to $1.6 billion in the June 2017 quarter, $1.2 billion lower than in the previous quarter. This is mainly driven by the services sector, with a surplus of $1.3 billion, the highest surplus on record.

New Zealand’s current account deficit is 2.8 per cent of GDP in the June year, down from 2.9 per cent in the last quarter, ahead of market forecasts for a deficit of 3.1 per cent.

"Today’s result is one of the dividends of an increasingly diversified economy, with both services and goods exports performing well in the quarter,” Mr Joyce says. “The services sector in particular, had a strong run in the quarter driven by $3.7 billion of spending by overseas travellers.”

Key highlights included:

- Services surplus increased $295 million to $1.3 billion

- The goods deficit decreased $677 million to $446 million

- New Zealand’s net international liability position is equivalent to 57.5 per cent of GDP, down from 57.8 per cent in the previous quarter, the lowest since records began.

"The days of New Zealand as a one-trick economy are behind us, but this does not mean we can rest on our laurels. We need to continue the government's strong economic plan so we can further diversify and grow our economy.”