New Zealand's overseas debts fell in the first quarter, thanks mainly to the devastating Christchurch earthquake in February and a trade surplus, the government statistics agency announced Wednesday.
The seasonally adjusted current account balance was 1.8 billion NZ dollars (1.46 billion U.S. dollars) in the red in the March quarter, down by 1.1 billion NZ dollars from the December 2010 quarter deficit, said Statistics New Zealand.
Reinsurance claims from overseas arising from the Christchurch earthquake that killed at least 181 people on Feb. 22 were estimated at 7.6 billion NZ dollars, but they did not affect the current account, said a statement from the agency.
The smaller current account deficit in the first quarter was driven by a fall of 1 billion NZ dollars in income from inward foreign investment.
"Company profits fell as foreign-owned insurance companies reported losses from the Canterbury earthquakes," said Statistics New Zealand balance of payments manager John Morris.
New Zealand's trade surplus rose by 275 million NZ dollars in the March quarter, mainly due to higher export prices, driven by increases in exports of dairy products, crude oil and forestry products.
The current account deficit of 8.3 billion NZ dollars for the year to March was about 4.3 percent of GDP for the 2010 year.
At the end of March, New Zealand's net international liabilities were 148.2 billion NZ dollars, compared with 158.6 billion NZ dollars at the end of December 2010.
Much of the fall was due to outstanding reinsurance claims from the February earthquake, which were an asset for New Zealand until the claims were paid.
"Total outstanding reinsurance claims on non residents from the September and February earthquakes combined are estimated at 11.1 billion NZ dollars," Morris said.
Other features of international investment in the March quarter included borrowing from overseas by the New Zealand government, and the banking sector reducing its overseas debt.