New Zealand has posted its biggest annual trade surplus in 28 years as Covid-19 led to a sharp fall in imports.
The trade surplus for the year ended October was driven by a 10-percent slump in imports during the period, notably in fuel and cars. Photo: 123RF
Official numbers show a surplus of $2.2 billion for the year ended October, the biggest since July 1992.
The surplus was driven by a 10 percent slump in imports during the period, notably in fuel and cars.
"Imports are down in part because of restrictions on international and domestic travel imposed in March to slow the spread of the pandemic," Stats NZ trade Manager Alisdair Allen said.
"That can be seen in the big drops in annual imports of things like turbojets, fuel, and cars."
International trade 'remarkably resilient'
Exports edged higher on the back of increased earnings from dairy and fruit.
Allen said imports were starting to increase again as international restrictions eased and supply chains got back into action, with $400m worth of vehicles imported in October.
Exports were getting back to a normal seasonal pattern and would start to ramp up again as agricultural production gets into full swing.
For the month of October, there was a deficit of $501m, just under half the size of the deficit recorded last year.
However, the effect of the pandemic was notable in an increase in sales of breathing apparatus and the export of planes and aircraft parts, which reflected planes being sent overseas for long term storage.
"All up, international trade has proven remarkably resilient, and that's been a boon for a small exporting economy like New Zealand. And there are signs the recovery is strengthening," ASB economist Nat Keall said.
He said shipping delays, shortages of containers, and other transport disruption was a factor constraining imports, but he expected over time that the big surplus would disappear.
"We still expect the merchandise trade balance to move back to deficit as the pandemic recedes from view and the global economic recovery strengthens."