By Gyles Beckford
WELLINGTON, Dec 22 (Reuters) - New Zealand's annual current account deficit widened in line with expectations in the third quarter on higher imports and a rising shortfall in investment income, adding pressure to the currency.
The annual current account deficit widened to NZ$15.5 billion ($8.9 billion) in the September quarter from NZ$14.98 billion in the previous quarter, data showed on Monday.
A Reuters poll forecast a NZ$15.5 billion shortfall.
The size of the deficit showed how unbalanced the New Zealand economy was at an unfavourable time, with the country in recession since the start of the year.
'The deficit is heading in the wrong direction and our concern is what this might mean for New Zealand's credit rating,' said Su-lin Ong, senior economist at RBC Capital Markets.
Ratings agencies have said previously that New Zealand's current account deficit is a risk to the country's sovereign rating, but it has been offset by the government's strong fiscal position.
The New Zealand dollar was unchanged after the data at $0.5745/55, while the yield on the March bank bill contract was flat at 4.41 percent.
The seasonally adjusted deficit for the September quarter narrowed to NZ$4.08 billion from NZ$4.65 billion in the second quarter as foreign investors earned less from their New Zealand investments and on higher exports, Statistics NZ (SNZ) said.
SNZ said the deficit equated to 8.6 percent of gross domestic product, on an expenditure basis, compared with a revised 8.4 percent in the previous quarter.
The agency said the deficit had been funded by an inflow of NZ$5.4 billion, much of which was the divesment of official reserves.
The annual balance had been gradually improving after hitting record high levels in 2006, helped by a weaker New Zealand dollar as well as stronger exports.
The Reserve Bank of New Zealand in its Dec. 4 monetary policy statement forecast the current account deficit to fall to 7.9 percent of gross domestic product in 2009, while the Treasury department last week the deficit peaking at 9.4 percent next year.
($1=NZ$1.74)
(Editing by Jonathan Standing) Keywords: NEWZEALAND ECONOMY/ (gyles.beckford@reuters.com ; +64 4 471 4231; Reuters Messaging: gyles.beckford.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WELLINGTON, Dec 22 (Reuters) - New Zealand's annual current account deficit widened in line with expectations in the third quarter on higher imports and a rising shortfall in investment income, adding pressure to the currency.
The annual current account deficit widened to NZ$15.5 billion ($8.9 billion) in the September quarter from NZ$14.98 billion in the previous quarter, data showed on Monday.
A Reuters poll forecast a NZ$15.5 billion shortfall.
The size of the deficit showed how unbalanced the New Zealand economy was at an unfavourable time, with the country in recession since the start of the year.
'The deficit is heading in the wrong direction and our concern is what this might mean for New Zealand's credit rating,' said Su-lin Ong, senior economist at RBC Capital Markets.
Ratings agencies have said previously that New Zealand's current account deficit is a risk to the country's sovereign rating, but it has been offset by the government's strong fiscal position.
The New Zealand dollar was unchanged after the data at $0.5745/55, while the yield on the March bank bill contract was flat at 4.41 percent.
The seasonally adjusted deficit for the September quarter narrowed to NZ$4.08 billion from NZ$4.65 billion in the second quarter as foreign investors earned less from their New Zealand investments and on higher exports, Statistics NZ (SNZ) said.
SNZ said the deficit equated to 8.6 percent of gross domestic product, on an expenditure basis, compared with a revised 8.4 percent in the previous quarter.
The agency said the deficit had been funded by an inflow of NZ$5.4 billion, much of which was the divesment of official reserves.
The annual balance had been gradually improving after hitting record high levels in 2006, helped by a weaker New Zealand dollar as well as stronger exports.
The Reserve Bank of New Zealand in its Dec. 4 monetary policy statement forecast the current account deficit to fall to 7.9 percent of gross domestic product in 2009, while the Treasury department last week the deficit peaking at 9.4 percent next year.
($1=NZ$1.74)
(Editing by Jonathan Standing) Keywords: NEWZEALAND ECONOMY/ (gyles.beckford@reuters.com ; +64 4 471 4231; Reuters Messaging: gyles.beckford.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.