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Record spending by New Zealanders travelling overseas was behind a larger current account deficit in the June 2016 quarter, Statistics New Zealand said today. The current account deficit was $1.8 billion for the June quarter, $187 million larger than the March 2016 quarter's deficit.
"More New Zealanders went overseas this quarter than in previous June quarters. And they spent the most ever recorded while travelling for work and holidays," international statistics manager Stuart Jones said. This caused services imports to increase, while services exports decreased, resulting in the $144 million fall in the services surplus; the biggest since March 2012.
The decrease in services exports was mainly influenced by a decrease in transportation services. Spending by international visitors to New Zealand also decreased slightly.
The primary income deficit increased by $135 million to $2,040 million in the June 2016 quarter, due to an increase in income on foreign direct investment in New Zealand.
"Overall, the profits earned by foreign-owned New Zealand companies increased this quarter," Mr Jones said. "The majority of this income was reinvested in the June quarter, rather being than paid out as dividends as it was last quarter."
The seasonally adjusted goods balance was a deficit of $452 million in the June 2016 quarter, $71 million smaller than the March 2016 quarter's deficit. The value of both exports and imports of goods grew strongly in the latest quarter; however, goods exports increased more than imports, narrowing the goods deficit.
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