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NZ POSTS FIRST MONTHLY TRADE SURPLUS IN 21 MONTHS(New Zealand Press Association Via Thomson Dialog NewsEdge)Wellington, April 27 NZPA - New Zealand posted a surprise trade surplus in March, breaking a 21-month streak of deficits, although the data did little to dampen concerns about the current account imbalance. Statistics New Zealand (SNZ) figures out today show the country clocked up a trade surplus of $59 million in March, defying economists' expectations of a $250 million deficit. While March is seasonally a surplus month, with the country's agricultural exports in full swing, in 2005 there was a $190m deficit and today's surplus was the first since May 2004. Economists said it was too soon to break out the bubbly just yet. On an annual basis the trade deficit ballooned to $7.072 billion -- a record for a March year, indicating the gap between New Zealand's revenue and spending from offshore dealings would likely still swell to 9 percent of GDP, from its current 8.9 percent. In the March 2005 year the deficit was $4.36 billion. Annette Beacher, director of economic analysis at Citigroup, said while previous expectations were for a current account blowout of over 10 percent of GDP, returning to a more manageable deficit of around 7 percent of GDP was ``not on the cards'' until mid next year. ``The bottom line remains unchanged,'' she said. ``Inflation is set to remain above 3 percent for several more quarters, and the Reserve Bank has no case to reduce the cash rate this year.'' Reserve Bank Governor Alan Bollard today left the OCR steady at 7.25 percent for the third straight time at his six-weekly review. This month's surplus was equivalent to 1.9 percent of exports whereas the average March month surplus over the last decade has been 3.5 percent of exports. Exports during the month were 13.8 percent higher than in March 2005 with dairy exports the main contributor. Imports were up 4.6 percent on a year ago, mainly due to the higher cost of oil and petrol products. Deutsche Bank chief economist, Darren Gibbs, said much of today's surplus could be attributed to the way SNZ converted foreign currency export receipts and import invoice costs. While export receipts were calculated weekly, import costs were calculated fortnightly, meaning exports benefited more from the sharp fall in the currency during the month than imports -- with import costs likely to play ``catch up'' in April. The New Zealand dollar tumbled around 7 percent in March, from US66.40c to US61.50c. Goldman Sachs JB Were economist, Shamubeel Eaqub, said the improvement in dairy exports was linked to inventory rundown, with volume data suggesting that first quarter exports were lower for most categories, except dairy and wool. On a seasonally-adjusted basis, exports increased 2.6 percent in the March quarter following a 4.6 percent increase in the December quarter. The main contributors were milk powder, butter, and cheese; aluminium products; mechanical machinery and equipment; and wool. Dairy products were up 3.7 percent on top of a 10 percent increase in the December quarter. Meat and edible offal exports were down 14.9 percent on the December quarter and meat exports were their lowest in five years. Seasonally-adjusted imports rose 4 percent on the December quarter with crude oil imports up 27 percent ($171 mill). NZPA WGT rjp sml kn |