Biggest annual trade surplus recorded since 1960

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The country has posted a record annual trade surplus as Covid-19 led to a sharp fall in imports.

Calves on a Manawatū dairy farm

Exports have been sustained by demand for dairy, meat and other primary produce.
Photo: RNZ/Sally Round

Official numbers show a surplus of $3.26 billion for the year ended November, the biggest since records began in 1960.

The surplus was driven by a 12 percent slump in imports during the period, notably in fuel and cars.

The economic slowdown caused by the pandemic and trade disruptions were seen as major causes for the weaker import bill.

“The fall in imports coincides with disruptions to global supply chains and delays at New Zealand ports,” Stats NZ international trade manager Alasdair Allen said.

Exports have been sustained by demand for dairy, meat and other primary produce, as well as more unusual items such as breathing apparatus.

For the month of November, there was a surplus $252m – the first for a November in seven years. Normally there would be a deficit as pre-Christmas import demand would be at its highest.

“The merchandise export market has been supported by its exposure to China – where growth has recovered far more strongly than anywhere else – and concentration in agricultural commodities – the world still has to eat, even in a pandemic after all,” ASB economist Nat Keall said.

However, Keall said in time the surplus would fall and overseas trade would return to something approaching normal patterns.

“Over a broader horizon, there is scope for the merchandise trade balance to begin edging back towards deficit as the global economic recovery kicks into gear and import activity picks up.”

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