Point of Order: NZ’s external deficit close to record levels......

.....so why aren’t the politicians talking about it?

As New Zealand confronts a near-record current account deficit few, if any, of the country’s politicians are talking about it or the underlying problems.

NZ’s external deficit is expected to continue narrowing, but at a slower pace than forecast a few months ago.

Point of Order: Are politicians turning a blind eye to the hard times hitting farmers and other foreign- exchange earners?

New Zealanders – as they launch into the general election campaign – at the same time will have to confront the harsh realities the economy presents. Already Opposition politicians are blaming the Labour government for the state of our economy and certainly it must shoulder some of the blame.

Point of Order: Plenty to ponder on economy......

.....while OCR stance softens, a widening current account deficit threatens NZ’s credit rating

It’s been an eventful week for the New Zealand economy. On one side, the Reserve Bank was seen as putting the brakes on the Official Cash Rate, with a 25 basis points increase heralded as good news for mortgage-holders. On another, NZ’s record current account deficit is seen as posing a real threat to NZ’s sovereign credit rating.

The current account deficit, reflecting we’re spending more than we’re earning overseas, rose to its highest level ever of $33.8bn last year. As a percentage of GDP, a measure of its significance in the context of NZ’s overall economy, it weighed in at 8.9%, the highest it has been since the 1970s.

Could it get worse before it gets better?