NZ: Growth warning from external accounts - BNZ

Doug Steel, Senior Economist at BNZ, notes that the New Zealand’s current account deficit was 3.0% of GDP in the year ended March 2016.

Key Quotes

“This matched market expectations, via the combination of a slightly higher than expected (unadjusted) surplus in Q1 against a revision of a slightly wider deficit in the previous quarter (the annual deficit for the year ended December 2015 was revised to 3.2% of GDP from 3.1% previously). Nothing to excite markets there.

The annual deficit as a share of the economy was marginally smaller than the 3.1% we anticipated and slightly wider than the 2.9% the RBNZ published in the June Monetary Policy Statement. Again, nothing much in that but, at the margin, this does not provide the Bank any comfort with the NZD still sitting well above its projections.

The external accounts provide no reason for us to make any last minute changes to our view for tomorrow’s Q1 GDP. We remain of the view that the current account deficit will widen marginally over the coming year, to around 3.5% of GDP.”