WELLINGTON, March 15 (Xinhua) -- New Zealand's annual current account deficit widened to 33.8 billion NZ dollars (21.05 billion U.S. dollars), or a record of 8.9 percent of gross domestic product (GDP) since 1988, in the year ended Dec. 31, 2022.
This is the largest annual current account deficit to GDP ratio since the series began in March 1988. The largest prior to the COVID-19 pandemic was 7.8 percent of the GDP in December 2008, during the global financial crisis, the statistics department Stats NZ said on Wednesday.
The 2022 account deficit was 12.7 billion NZ dollars (7.91 billion U.S. dollars) wider than in the year ended Dec. 31, 2021, when the account deficit was 6 percent of the GDP, Stats NZ said.
A current account deficit reflects that New Zealand is spending more than earning overseas. The size of the current account balance in relation to the GDP shows its significance in the context of New Zealand's overall economy, it said.
The widening in the annual current account deficit was mainly due to the widening of goods and services deficit and the income deficit, Stats NZ said.
High imports values drove the current account deficit. The increase in goods imports was driven by machinery, petrol, and motor vehicles. The increase in services imports was driven by transportation services, business services, and travel services, it said.
"Since New Zealand's borders opened, more New Zealanders have been traveling overseas. The spending on both air transport and travel contributed to the rise in services imports for the year to December 2022," Stats NZ institutional sectors senior manager Paul Pascoe said.
Dairy and meat products contributed to the increase in goods exports, while the increase in services exports was driven by travel services -- the spending of overseas visitors in New Zealand, Pascoe said.