[6 September/Radio NZ]

New Zealand’s purchasing power with the rest of the world rose in the last quarter due to higher dairy prices. The terms of trade increased 0.6 percent in the three months to June. ASB Senior Economist, Mark Smith, said the terms of trade were now only 1.4 percent below the late 2017 peaks, and up 36 percent on historical averages. Exports rose 2.4 percent, largely due to gains in the dairy and meat sectors and the low New Zealand Dollar. Dairy products rose 3.2 percent mainly due to milk powder. Imports rose 1.7 percent largely due to increased fuel costs. Mr Smith added there would likely be some slippage to good export prices if dairy prices continued to fall. He noted recent falls in the dollar would help export incomes but would add to the import bill.