Dec 20, 2007

Balance of Payments Deteriorates

The Hive is a little concerned at the quarterly balance of payments figures that were released today. These figures mean that for the year ended September 2007 the deficit was $14.2 billion (8.3 percent of GDP). This compares with a deficit of $13.7 billion for the year ended June 2007 (8.1 percent of GDP).

New Zealand's International Investment Position as at 30 September 2007 was a net liability position of $151.1 billion, 1.6 percent higher than at 30 June 2007. A net liability position means that New Zealand's financial liabilities to the rest of the world exceed assets.

We hope that those who continue to speculate on the value of the New Zealand dollar have a good look at these statistics. They are a further confirmation that the current value of the New Zealand dollar is not justified by the fundamentals.

Of concern to The Hive is the flat performance of goods and services exports. If it was not for a new item - oil exports, there would have been a serious decline in overall goods exports. The field producing this oil is not expected to be producing such large volumes for that much longer.