Tuesday, March 24, 2009

[NZ DATA PREVIEW]

[NZ DATA PREVIEW] Due to an ever present large net investment income deficit and a deteriorating trade balance, NZ's annual current deficit looks set to widen further to around $16 bln or 9% of GDP from 8.6% prior. With S&P lowering NZ's foreign currency AA+ rating mid-Jan to a negative outlook by warning its external imbalances are unsustainable; the widening gap will no doubt not be welcomed, and could well trigger further pressure on the rating. NZ's Fin Min has already warned that this quarter's deficit will be uncomfortably large and one of the worst in the OECD. Nonetheless; this could well represent the peak of the cycle; as the global recession weakens import demand and reduces interest payments on NZ's chunky overseas debt. Data due March 25 21.45GMT.

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