(Updates with economist comment in fourth paragraph.)
Nov. 24 (Bloomberg) -- New Zealand’s trade deficit narrowed in October more than economists expected as overseas sales of meat and wool boosted exports.
Imports exceeded exports by NZ$282 million ($209 million), from a revised NZ$789 million deficit in September, Statistics New Zealand said today in Wellington. The median estimate in a Bloomberg News survey of nine economists was for a NZ$450 million shortfall.
A smaller deficit adds to signs that New Zealand may reverse a decline in its annual trade balance, which has halved in the past year. Prime Minister John Key, who is bidding for a second term at an election Nov. 26, is backing exporters who sell to Australia, China and other Asian markets to increase sales even as global prices decline.
“Exports are starting to ease, reflecting lower commodity prices,” Nick Tuffley, chief economist at ASB Bank Ltd. in Auckland, said in a research note before today’s report. “Underlying demand for imports continues to recover as domestic demand in New Zealand picks up.”
The New Zealand dollar was little changed after the report. It bought 74 U.S. cents at 10:58 a.m. in Wellington from 73.94 cents before the data was released.
Exports rose 5.3 percent from a year earlier to NZ$3.88 billion, the highest level since June, today’s report showed. Economists expected NZ$3.76 billion.
Overseas sales of meat rose 22 percent from a year earlier, while crude oil and wool shipments also rose as prices in foreign markets increased, the agency said.
Dairy exports, which make up a fifth of overseas sales, increased for a second month, rising to NZ$1.02 billion. Still, they were 7.1 percent less than in October 2010.
Commodity prices declined for a fifth month in October, falling 3.5 percent from September, according to an index released Nov. 1 and calculated by ANZ National Bank Ltd. Prices have declined 7.9 percent since May.
Imports rose 6.6 percent in October from a year earlier to NZ$4.16 billion. Economists predicted NZ$4.27 billion.
Imports were led higher by fertilizers, fuel and crude oil, today’s report showed.
Crude oil imports increased 11 percent from October last year. Prices rose 37 percent while volumes declined, the agency said. Gasoline imports jumped 22 percent, led by diesel.
New Zealand had a trade surplus of NZ$627 million in the 12 months ended Oct. 31, the smallest annual surplus since July last year. The excess narrowed from a revised NZ$689 million in the year through September and NZ$1.26 billion in the year through October 2010. Economists forecast a 12-month surplus of NZ$490 million.
--With assistance from Daniel Petrie in Sydney. Editor: Garfield Reynolds
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