Overseas tourists help shrink New Zealand's current account deficit

Record spending by foreign tourists helped offset plunging dairy prices to narrow New Zealand' s current account deficit at the end of last year, the government statistics agency said Wednesday.

The annual current account balance was a deficit of 7.7 billion NZ dollars (5.09 billion U.S. dollars), or 3.1 percent of gross domestic product (GDP) for the year ending December, down from 8.1 billion NZ dollars (5.36 billion U.S. dollars), or 3.3 percent of GDP, for the year ending September 2015, according to Statistics New Zealand.

The decrease was mainly due to a smaller investment income deficit and a higher level of spending by international visitors to New Zealand.

"Over the 2015 year, spending by international visitors increased by 2.6 billion NZ dollars (1.72 billion U.S. dollars), to reach our highest recorded annual visitor spend despite the fall in the latest quarter," international statistics manager Stuart Jones said in a statement.

In the quarter to the end of December, the current account balance widened by 221 million NZ dollars (146.26 million U.S. dollars) to a deficit of 1.9 billion NZ dollars (1.26 billion U.S. dollars).

The larger deficit was driven by a fall in earnings from both goods and services exports, led by the collapse in dairy prices.

"While lower petrol prices caused the value of imports to decrease, the fall in dairy prices in the latest quarter had a bigger impact on our exports, resulting in a larger deficit," Jones said.