NZ Economy on Brink: Current Account Deficit Hits Record High

New Zealand's economic outlook is expected to take another hit with the release of two key pieces of data. The September current account deficit is likely to have increased to 8.6% of GDP, while the gross domestic product (GDP) data will show another quarter of economic decline.

The current account figures are expected to record an investment income balance of minus $3.4 billion, with the September deficit reaching $4 billion and pushing the annual deficit over $15 billion.

Export receipts held steady in September as the drop in the New Zealand dollar offset the decline in world prices for commodity exports. However, the import bill was inflated by higher prices, particularly a 31% increase in petroleum products.

Westpac chief economist Brendan O'Donovan attributed the country's struggles to its spendthrift ways and a lack of consumer behavior change in response to higher interest rates. He warned that households will now be forced to adjust their spending habits due to reduced access to credit, job insecurity, and rising prices.