The deficit narrowed sharply from the previous quarter, easing pressure on the RBNZ amid external balance concerns.
New Zealand’s current account deficit for Q1 shrank to NZ$1.008 billion, beating expectations of NZ$0.967 billion and marking a sharp improvement from the prior quarter’s NZ$5.984 billion deficit. The seasonally adjusted deficit also narrowed to NZ$4.552 billion from NZ$4.452 billion previously.
For the year to March, the deficit stood at NZ$16.3 billion, or 3.6% of GDP. The narrower deficit may provide modest relief to the Reserve Bank of New Zealand as it monitors external imbalances.
No immediate market reaction was reported following the release.