Tourism spurs services surplus to a record $1.3 billion

Press Release – Statistics New Zealand

20 September 2017 – New Zealands current account deficit narrowed to $1.6 billion in the June 2017 quarter, Stats NZ said today. This smaller deficit was due to a record high $1.3 billion services surplus and a smaller primary income deficit.Tourism spurs services surplus to a record $1.3 billion

20 September 2017 – New Zealand’s current account deficit narrowed to $1.6 billion in the June 2017 quarter, Stats NZ said today. This smaller deficit was due to a record high $1.3 billion services surplus and a smaller primary income deficit.

Record-high services trade

New Zealand exported a record $5.8 billion worth of services in the June quarter, seasonally adjusted, while importing a record $4.5 billion worth of services.

The increase in services exports was driven by $3.7 billion worth of spending by overseas travellers in New Zealand (exports of travel services). This is the largest-ever seasonally adjusted export of travel services. Part of this increase was due to the World Masters Games in April, and the British and Irish Lions Rugby tour to New Zealand in the June and September quarters.

Overall, the seasonally adjusted goods and services balance for New Zealand in the June 2017 quarter was a surplus of $834 million.

New Zealand had a seasonally adjusted goods deficit of $446 million this quarter. This is smaller than the March 2017 quarter deficit of $1.1 billion due to stronger goods exports in the latest quarter.

Current account remains in deficit

The seasonally adjusted current account balance was a deficit of $1.6 billion for the June 2017 quarter.

New Zealand’s goods and services balance was a surplus (we exported more than we imported), but the deficit in the primary and secondary income balance means the overall current account balance is a deficit.

New Zealand’s primary income deficit was $1.9 billion in the June 2017 quarter, $403 million smaller than the March quarter.

“Foreign investors in New Zealand earned less income compared to last quarter, while New Zealand investments overseas earned more,” international statistics senior manager Daria Kwon said.

The smaller primary income deficit in the June quarter was largely caused by a $295 million increase in investment income from New Zealand investment abroad (inflow) and a $73 million decrease in income earned by foreign investment in New Zealand (outflow).

New Zealand’s secondary income deficit increased $188 million to reach $522 million in the June 2017 quarter. The increase in this deficit was caused mainly by large payments of general government current transfers such as foreign aid. Our outflows of secondary income were $1.0 billion in this quarter, twice our inflows of secondary income ($500 million).

For an overview of movements in the June 2017 quarter, see the overview diagram in the ‘Downloads’ box.
ENDS

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