Saturday, 31 March 2012

Mmmm BOP*

Since it's the end of Q1 2012 today, I'd thought it might be time to publish this pretty little chart I put together a few weeks ago:

New Zealand's Balance of Payments (BOP) 2001 - 2011

It's New Zealand's Balance of Payments (BOP) from 2001 - 2011. The green line is the balance of payments itself, which is the sum of the balance on goods and services - the blue line (i.e. exports minus imports) and the balance on income and current transfers - the red line (i.e. money into the country minus money out).

As you can see, the trend was pretty much all in the wrong direction (downwards) until Q2 2008. From then on out exports exceeded our imports, and in Q3 2009 we actually went into surplus for the first time in many years.

It's great to see our exports are now making us more than what our imports are costing us. The red line is now the worrying one. However, it does seem the prosperity of the last decade, especially prior to the pre-GFC recession New Zealand was in by the end of 2008, shows our worrying tendancy to borrow up large during a boom and spend on housing and imports.

*Obligatory 90s pop music reference.