New Zealand’s current account deficit shrank to 8.5 per cent of gross domestic product (GDP) in the year to March, Stats NZ said.

The shortfall came to $33 billion in the latest period, compared with $34.4b (9.0 per cent of GDP) in the December year.

This is compared with an annual current account deficit of $24.2b (6.8 per cent of GDP) in the March 2022 year.

Balance of payments current account data records a nation’s transactions with the rest of the world - specifically its net trade in goods and services, its net earnings on cross-border investments, and its net transfer payments.

The December year deficit was the biggest since the current data series began in 1988.

Over the March quarter, New Zealand’s seasonally adjusted current account deficit was $8.3b.

In the financial markets, there was little reaction to the data.

By late morning, the NZ dollar was at US61.55c and the two-year swap rate was at 5.40 per cent.

Stats NZ said that, as at March 2023, New Zealand’s net international liability position narrowed to $189.1b from $194.6b at December 31, 2022.

In the March 2023 quarter:

- The seasonally adjusted goods deficit narrowed to $3.9b.

- The seasonally adjusted services deficit narrowed to $1.8b.

- The primary income deficit narrowed to $2.7b.

- The financial account recorded a net outflow of $3.1b.