Financial Information
Current account deficit ugly
www. interest. co. nz Current account deficit Worse than expected NZ$13. 8 bln vs NZ$13. 2 bln Culprit was foreign earnings Panel 2 NZ assets overseas poor Foreign assets in NZ did well Direct did well, NZX not so well Divs = NZ$1000 pp/qtr Panel 3 Deficit 7. 8% of GDP Better but still bad NZ Inc spends too much Recipe for NZ$ slump Credit rating downgrade? Panel 4 Most borrowings spent Banks borrowed NZ$21. 2 bln NZ$16 bln to mortgages Rest went to businesses NZ$6 bln for new houses NZ$10 bln consumed
The double-whammy is everywhere: a foreign-owned company shuts down local production and moves it off-shore. So instead of making it here, we then have to pay to import it and then buy forex again to export the profits from the sale of it.
Look in your bathroom next time you go. It anything in there made in NZ? There isn’t much left. My mouth wash has gone from Petone to Australia and is now made in Thailand. Most of the rest comes from Australia or China. Every day items.