NZ: Goods trade deficit narrowed in July - ANZ

Analysts at ANZ note that at a deficit of $143m, the unadjusted trade balance of NZ economy came in narrower than expected, but base effects and revisions to June’s print saw the annual deficit widen $0.2bn to $4.4bn.

Key Quotes

“The big picture remains solid with broad-based strength across most export sectors, led by strong demand from Greater China and the rest of Asia.”

“Seasonally adjusted export values rose 6.3% m/m, driven largely by an impressive 20.1% m/m rise in dairy (reflecting the brief recovery in milk prices earlier in the year and solid volumes growth of 11.8% m/m).”

“Seasonally adjusted imports contracted 0.4% m/m, largely maintaining June’s strong 9.6% rise. In annual terms, imports are up 21.3%, still reflective of a solid domestic demand backdrop.”

“The shine has come off the world price for a number of New Zealand exports in recent months, but a weaker NZD is expected to contain further widening in the trade deficit from here, with strong milk production providing further support.”