WELLINGTON (Reuters) - New Zealand reported a slightly larger-than-expected current account deficit in the third quarter as overseas income of domestic companies was lower than that of foreign firms operating in the country, official data showed on Wednesday.
The actual quarterly deficit was NZ$4.679 billion in the three months to September, according to Statistics New Zealand, wider than the NZ$4.29 billion deficit analysts had expected.
The New Zealand dollar <NZD=D4> initially dropped almost 0.3 percent to $0.6966. It last stood at $0.6974.
"The current account deficit was very slightly wider than market expectations...we were surprised by the (relatively low) rate of return by New Zealand's assets overseas," said Sharon Zollner, chief economist at ANZ Bank.
Net out flow in primary income, rose NZ$136 million to NZ$2.5 billion in the September quarter.
"New Zealand businesses earned less income from their overseas subsidiaries this quarter, while the income earned by foreign-owned businesses was relatively steady," Statistics New Zealand said in a research note.
The annual current account deficit to September was NZ$7.1 billion, equating to 2.6 percent of gross domestic product
A record value of imports, driven by cars, was largely offset by a strong showing for New Zealand dairy exports.
A companion dataset also released on Wednesday showed a similar trend, with imports rising to a record NZ$5.82 billion in November from NZ$5.4 billion in the previous month.
That pushed the monthly trade deficit higher to NZ$1.19 billion from NZ0.84 billion the previous month.
(Reporting by Charlotte Greenfield; Editing by David Gregorio)
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