New Zealand sees largest annual account deficit to GDP ratio

Wellington, March 15 (SocialNews.XYZ) New Zealand's annual current account deficit widened to NZ$33.8 billion ($21.05 billion), or a record of 8.9 per cent of gross domestic product (GDP) since 1988, in the year ended December 31, 2022, the statistics department announced on Wednesday.

This is the largest annual current account deficit to GDP ratio since the series began in March 1988, reports Xinhua news agency.

The largest prior to the Covid-19 pandemic was 7.8 per cent of the GDP in December 2008, Stats NZ said.

The 2022 account deficit was NZ$12.7 billion wider than in the year ended December 31, 2021, when the account deficit was 6 per cent of the GDP, it said.

A current account deficit reflects that New Zealand is spending more than earning overseas.

The size of the current account balance in relation to the GDP shows its significance in the context of New Zealand's overall economy, Stats NZ said.

The widening in the annual current account deficit was mainly due to the widening of goods and services deficit and the income deficit.

High imports values drove the current account deficit. The increase in goods imports was driven by machinery, petrol, and motor vehicles. The increase in services imports was driven by transportation services, business services, and travel services, it said.

"Since New Zealand's borders opened, more New Zealanders have been travelling overseas. The spending on both air transport and travel contributed to the rise in services imports for the year to December 2022," Stats NZ institutional sectors senior manager Paul Pascoe said.

Dairy and meat products contributed to the increase in goods exports, while the increase in services exports was driven by travel services -- the spending of overseas visitors in New Zealand, Pascoe said.

Source: IANS