We exported more but got less bang for our buck in the last three months of 2023.

And we imported fewer things but still paid more than we did for those imports in the September quarter.

Stats NZ said despite that somewhat painful-to-digest scenario, New Zealand still managed to narrow its trade deficit in the quarter from $8.1 billion to $4.6b.

“Certainly the terms of trade was far more negative than we expected,” Westpac senior economist Darren Gibbs said today.

Export prices for goods fell 4.2 per cent and import prices rose 3.8 per cent.

But the silver lining in today’s data was the stronger export volumes, Gibbs said.

High fuel prices in October were a major influence on the negative terms of trade, he added.

Petrol and related products comprised 9.9 per cent of New Zealand’s imports by value in the quarter.

“The big picture is the trade deficit is shrinking and it’s largely because imports are being squeezed,” he told the Herald.

“Import volumes were lower. That’s a positive for GDP as well.”

Export prices for goods fell 4.2 per cent and import prices rose 3.8 per cent. Photo / Getty Images

Businesses belt-tightening were partly responsible for the weak capital goods (durable goods such as machinery and non-food items) imports.

Gibbs said the robust export volumes recorded today showed real GDP in the fourth quarter might have been stronger than previously thought.

December quarter GDP statistics will be released on March 21.

Provisional data from Stats NZ showed the economy shrank 0.3 per cent in the September quarter.

In year-on-year terms, the deficit was down from $2.1 billion in late 2022 to $696 million in the last three months of 2023.

Stats NZ said total goods and services exports for the December 2023 quarter were $24.2b.

Total imports were $28.8 billion, bringing total two-way trade in the quarter to $53b.

Compared to the December 2022 quarter, the most volatile export sectors included travel services, up $350m to $1.8b and transportation services, down $730m to $1.6b.

The trade data published today emerged amid concerns about the impact crises in Panama and the Red Sea are having on shipping.

Shipping rates for importers and exporters have in many cases risen.

A drought has impacted the Panama Canal and Houthi attacks on Red Sea shipping have caused some companies to use the Cape of Good Hope route instead of the Suez Canal.