Factors that keep our need to import relatively high include; exchange rate movements, tax cuts and one-off factors. Overseas merchandise trading refers to the export and import of goods, services are not included. The balance of merchandise trade is equal to the value of Exports minus Imports. The balance is said to be in “Deficit” when the value of what we are paying is more than we earn as a country.
New Zealand is greatly dependent on international trade. New Zealand’s economy has traditionally been based on a foundation of exports from its very efficient agricultural system: meat, dairy products, forest products, fruit and vegetables, fish, and wool. New Zealand imports mainly machinery and equipment, vehicles and aircraft, petroleum, electronics, textiles and plastics. Its main trading partners are: Australia, European Union, The United States, China and Japan.
“While imports were boosted by a large one-off item for the second straight month, the underlying picture is still of a strong uplift in business investment, which had been through something of a flat patch over the year to June,” Westpac Banking Corp senior economist Michael Gordon said in a note.
“This actually bodes well for future growth in New Zealand, though it will weigh on the trade balance in the meantime.”