Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Crazy Fools Chasing Crazy CyberNews -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (334)	6/22/2001 4:21:12 AM
From: ms.smartest.person	Respond to of 5140

Improvement in NZ current a/c expected in Q1 By Gyles Beckford WELLINGTON, June 22 (Reuters) - A continuing improvement in New Zealand's current account is expected to be reflected in March quarter data to be issued on June 26, analysts said on Friday. The buoyant export sector, combined with the peak of the tourism season, is seen delivering a strong goods and services trade balance. A Reuters poll of 12 economists showed an average market expectation of a deficit of NZ$250 million for the March quarter, taking the annual deficit to NZ$5.5 billion, equating to five percent of gross domestic product. The current account measures the balance of payments for a country's goods and services including investment flows. The December quarter deficit was NZ$1.86 billion, and the annual deficit NZ$5.96 billion. "Over the first quarter, monthly merchandise trade surpluses surprised on the upside, with the strong finish to the dairy season a prime reason," Westpac economist Nick Tuffley said. Terms of trade data for the March quarter showed a rise of 4.7 percent, as a fall in import prices outstripped a drop in export prices during the period, and services rose strongly. Over the year ended March, the overall terms of trade had risen by 11 percent, and export price index by 20 percent. "That's pretty strong in the context of New Zealand's history. The volumes haven't been doing that well, but the prices have been holding up pretty well. So strong commodity prices will have boosted the current account," BNZ treasury economist Craig Ebert said. A 12 percent growth in tourism arrivals in the quarter compared with the previous year would be a key booster of tourism earnings. IMPROVEMENT SEEN AS SUSTAINABLE Economists said a gradual improvement in the current account balance over the rest of the year was expected. "Over Q1 we expect the current account deficit will fall to a level that can no longer be considered a significant risk to the New Zealand economy. By year end we expect an even more benign deficit -- close to four percent of GDP," Tuffley said. The deficit was likely to stabilise around that level, mainly from continued surpluses in the tradeables sector. The New Zealand dollar NZD= was also seen as remaining competitive into 2001. "In theory, the associated risk premium on the NZD should dissipate," he added. A recent Reuters poll showed an average expectation that the kiwi would be at $0.4580 by year end, rising to $0.4710 by the end of March 2002. INVESTMENT FLOWS STILL THE TEST Volatile investment income balance would be the March quarter current account's "NZ$2 billion lottery", Tuffley said. "Corporate earnings reporting is generally quieter in the March quarter, so we expect some reduction in the net outflow of income...a slightly stronger NZ dollar will have (also) dampened the earnings of foreign owned NZ exporters." Both items had contributed to a spike in the December quarter investment income outflows, he added. Statistics New Zealand will revise the December investment and current account figures after the addition of new international investment flow data, which it plans to report every quarter. Previously this data had been revised annually. The addition of new data meant future revisions were less likely, the BNZ's Ebert said, but the category was always volatile quarter by quarter. A slowing in international corporate profitability could mean that the inflow from New Zealand direct offshore investments could be weak, he said. au.dailynews.yahoo.com