NZ: Q4 Current account deficit smallest in 3yrs - TDS

According to the analysts at TDS, there was no market impact on the release of today’s NZ data as the Q4 Current account deficit came in virtually on mkt expectations, the deficit at NZ$2.335b, the smallest in 3yrs (mkt at -NZ$2.425b), 2.7% of GDP. 

Key Quotes

“In terms of a breakdown, services trade bounced back in Q4, thanks to strong tourism exports. This should continue with the softer NZD and upcoming Lions tour mid-year. In contrast the goods deficit widened in Q4. Strong domestic fundamentals kept demand for imports elevated, while good exports were flat.”

“For GDP tomorrow, this implies net exports are likely to serve as a drag. Last of all NZs international balance sheet improved on firmer offshore based earnings and low rates keeping a lid on foreign interest payments.”