The difference between what New Zealand earned and spent internationally has widened.
Official figures show the seasonally-adjusted current account deficit increased to $2 billion in the three months to June, compared with a revised $617 million shortfall in the previous quarter.
Statistics New Zealand said the worsening deficit was due to a sharp decline in exports, led by falls in dairy products. Exports, though, are still better than a year ago, when drought conditions hit agricultural production.
The goods surplus fell from $1.6 billion to $339 million in the quarter, while exports fell by $1.1 billion to $12.5 billion from the previous quarter's record high.
Imports rose $183 million to $12.1 billion, as increased volumes more than offset an overall fall in prices.
The balance of services remained little changed, recording a $460 million surplus, while the income deficit also remained relatively unchanged at $2.6 billion.
The growing economy also boosted the earnings of local firms owned by foreigners. Income from foreign investment in New Zealand increased by $180 million as investors received higher dividends from their shares in New Zealand companies.
New Zealand investors also earned more dividends from overseas shareholdings, contributing to a $109 million increase in income from investments abroad.
On an annual basis, the current account deficit narrowed to $5.8 billion, which is its smallest amount since March 2011, or 2.5 percent of national output.
That compares with the $6 billion deficit for the year to March, and it is also $2.1 billion smaller than that for the year to June 2013, which was 3.7 percent of national output.
The net international liability position, which measures the value of the country's overseas assets less overseas liabilities, declined to $149.7 billion at the end of June, or 65.3 percent of gross domestic product.
Statistics New Zealand said that was the smallest net liability position as a percentage of GDP in almost 13 years.
The country's net external debt position, which measures overseas lending less overseas borrowing, increased $2 billion to $142.3 billion, despite the improvement in the net international liability position.
Close to expectations - economist
Economists had expected the annual deficit to be anywhere from 2.5 and 2.9 percent of the economy.
Westpac senior economist Michael Gordon said that, overall, the outcome was not surprising and financial markets did not react.
"Overall, it was pretty close to expectations, given that there was some uncertainty about how it would come out, given that this release included some changes to the measurement standards. There were also some data improvements that New Zealand goes through every quarter," he said.
"We saw the current account deficit narrow to 2.5 percent of GDP. That's the smallest deficit that we've had in a couple of years now. It's really reflecting the particularly favourable period that exporters had late last year, early this year and that's still being captured in the annual balance at this point."
Mr Gordon said he believed the deficit was about as low as it could go and what really mattered was how it compared with last year.
"We had a pretty short but severe drought in early 2013. That really hit exports through the June and even the September quarters," he said.
"By comparison, even though we have seen quite a really steep fall in world dairy prices, overall, export revenue is still holding up a bit better than it was same time last year. That will probably be true in the September quarter, so I think the next report will be a similar number, but after that we'll really start to see that effect of the falling dairy prices dominate."
He said he expected the deficit to increase to more like 3.5 percent of GDP by the end of this year.