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18 Mar 2015
Upside risks to New Zealand Q4 GDP - ANZ
FXStreet (Barcelona) - Philip Borkin, Senior Economist at ANZ, notes today’s NZ data suggests upside risks to the 0.7% qoq forecast for tomorrow’s Q4 GDP data release.
Key Quotes
“New Zealand recorded a quarterly current account deficit of $3.2bn (nsa) in Q4 – slightly larger than the median market expectation.”
“In seasonally adjusted terms, the quarterly current account deficit widened to $2.6bn, with the annual deficit growing to 3.3% of GDP – a 12-month high. The deterioration over the quarter was largely on account of a lift in the profitability of foreign firms operating in New Zealand – in itself a decent signal for the underlying strength of the domestic economy.”
“Given base effects, further falls in the terms of trade, and the domesticcentric nature of the economic expansion, the annual current account deficit will likely approach 5% of GDP over the course of 2015. Whether it widens beyond this is a more open question.”
“A widening current account deficit provides a reminder of the vulnerabilities that still exist – New Zealand’s external imbalances remain large. But it would be remiss not to acknowledge the improvement seen over recent times.”
“Net external debt, at 59.4% of GDP, is at an 11-year low, and the maturity profile of New Zealand’s gross liabilities has lengthened considerably. The economy is certainly not bullet-proof, but it is in a structurally more sound position than it was before the Global Financial Crisis.”
“Today’s data does suggest there is some marginal upside risk to our +0.7% q/q pick for Q4 GDP data tomorrow, on account of stronger-thanexpected services exports.”
Key Quotes
“New Zealand recorded a quarterly current account deficit of $3.2bn (nsa) in Q4 – slightly larger than the median market expectation.”
“In seasonally adjusted terms, the quarterly current account deficit widened to $2.6bn, with the annual deficit growing to 3.3% of GDP – a 12-month high. The deterioration over the quarter was largely on account of a lift in the profitability of foreign firms operating in New Zealand – in itself a decent signal for the underlying strength of the domestic economy.”
“Given base effects, further falls in the terms of trade, and the domesticcentric nature of the economic expansion, the annual current account deficit will likely approach 5% of GDP over the course of 2015. Whether it widens beyond this is a more open question.”
“A widening current account deficit provides a reminder of the vulnerabilities that still exist – New Zealand’s external imbalances remain large. But it would be remiss not to acknowledge the improvement seen over recent times.”
“Net external debt, at 59.4% of GDP, is at an 11-year low, and the maturity profile of New Zealand’s gross liabilities has lengthened considerably. The economy is certainly not bullet-proof, but it is in a structurally more sound position than it was before the Global Financial Crisis.”
“Today’s data does suggest there is some marginal upside risk to our +0.7% q/q pick for Q4 GDP data tomorrow, on account of stronger-thanexpected services exports.”