WELLINGTON (Reuters) - New Zealand's terms of trade rose 0.6 percent in the second quarter, data from Statistics New Zealand showed on Monday, recovering from a weakening in the previous quarter but falling short of expectations.
Export prices grew a seasonally adjusted 2.4 percent on the back of stronger dairy and meat prices, outpacing import price growth of 1.7 percent.
Economists were expecting the index to rise 1.0 percent, with export prices rising 3.0 percent and imports costs up 2.0 percent, a Reuters poll found.
The New Zealand dollar <NZD=D4> edged down to $0.6606 from $0.6615 before the release because the data missed expectations.
Nevertheless, the trade figures suggested that robust exports were a bright spot for the economy, which is experiencing capacity constraints, slowing migration and low business confidence which could see firms hold off on investment.
However, the result was unlikely to persuade the central bank to waiver from its stance to keep the official cash rate (OCR) on hold into 2020 as it waits for inflation to stabilise and keeps a close eye on risks to economic growth from sinking business confidence.
"There are no implications for our official cash rate view....Looking ahead, we expect the ToT (terms of trade) to remain at historically-high levels and a major structural support for the NZ economy," said Mark Smith, senior economist at ASB Bank.
The index fell in the previous quarter for the first time in more than a year, dragged down by dairy export prices.
Monday's data showed dairy prices had largely recovered in the June quarter, jumping 3.2 percent.
That rise was partially offset by rising prices for petroleum, the country's major import, as crude oil rose 14 percent to its highest in nearly four years.
(Reporting by Charlotte Greenfield; Editing by ERic Meijer)
