New Zealand's current account deficit widened in the first quarter, as dairy export prices and crude oil exports fell and the nation imported more fuel.
The current account gap was $2.8 billion, seasonally adjusted, in the three months ended March 31, up $600 million from the final quarter of 2011, according to Statistics New Zealand.
The annual deficit was $9.7b, or 4.8 percent of gross domestic product.
Weaker dairy prices are casting the biggest shadow on the New Zealand economy, forcing Fonterra to cut its forecast payments to farmers and slowing the pace of GDP.
In the first quarter, exports of services also fell, reflecting the drop off in visitors compared to the Rugby World Cup impact in the fourth quarter of 2011.
"The value of dairy exports fell despite an increase in volumes, as dairy prices fell for the third quarter in a row," the government statistician's balance of payments manager John Morris said.
Reinsurance premiums rose following the Canterbury earthquakes, which lifted overall insurance payments in the year by $400m. Outstanding reinsurance claims fell to $11.9b at March 31, down $1.2b from December 31.
The annual deficit mainly reflected fatter profits earned in New Zealand by Australian banks, even as their earnings fell in the latest quarter.
The surplus on goods narrowed to $117m in the first quarter, seasonally adjusted, the smallest since December 2008 and a slump from the $899m surplus in the fourth quarter last year.
Exports of goods fell $497m in the latest quarter while imports rose $402m.
The services deficit rose to $332m from a deficit of $214m three months earlier, mainly reflecting a drop in spending in overseas visitors, while Kiwis spent a record $1.17b abroad as the strong kiwi dollar made travel cheaper.
New Zealand's net international debt position was $141.2b at March 31, a decline of $3.6b from three months earlier.
NZN