New Zealand posts better than expected trade balance in December

New Zealand’s December trade balance came in better than market expectations. The seasonally adjusted trade balance came in at a deficit of NZD 241 million. On a non-seasonally adjusted basis, the trade deficit came in at NZD 41 million. Markets had projected a deficit of NZD 98 million. On a non-seasonally adjusted basis, values of export grew 13.8 percent, whereas the values of imports dropped 3.8 percent.

The seasonally adjusted exports and imports recovered in December, rising 9.1 percent and 3.9 percent respectively. However, the rebound in exports was higher. The latest annual deficit narrowed a bit to NZD 3.2 billion. Even if this was better than the 2015 deficit, the trade balance has been in a wide holding pattern since July, noted ANZ.

New Zealand’s two-way trade came in at NZD 100 billion. This is NZD 1.4 billion down from last year, but that was the third consecutive year that trade was valued more than NZD 100 billion. This shows the significance of trade to New Zealand. Monthly deficits could be volatile and much emphasis is note being put on the upside surprise, stated ANZ.

Relative movements in commodity prices and the NZD/USD hold the keys to the trade balance for this year, added ANZ. As January comes to an end, the TWI is sitting at about 80. This is higher than it was at any time last year and is in line with the highs seen in 2015.