Drop in current account deficit due to lower oil prices

Drop in current account deficit due to lower oil prices

The country's present account deficit for the year to 31 March suffered a fall due to dropping import costs, mainly because of lower oil prices.

This morning, Statistics New Zealand announced that the deficit plunged from 9% of GDP to 8.5% or from $3.72 billion to $2.68 billion. 
It should be noted that this is quite as per high both international and historical New Zealand standards. As of now the annual deficit is below $3 billion for the first time since March 2005.

Furthermore, for the first time since December 2003, the goods and services balance is now in surplus by $863 million.
The recession has also led to fewer imports apart from the lower oil prices.

As of now, investment income is well into deficit and it is now $3.272 billion for the year, growing $35 million over the quarter.

A drop in income from New Zealand investment abroad is the main reason, which plunged $192 million, partially offset by a fall in investment income from foreign investment in New Zealand, which fell $158 million.

It was concluded by the figures that New Zealand is still a debtor nation - the country's liabilities exceed assets by $176.6 billion or 98.2% of GDP.