NEW Zealand imports fell to the lowest since mid-2021 in the first quarter as a weak economy stems demand from consumers and businesses.

Imports slowed to NZ$17.9 billion (S$14.5 billion) in the three months to March, Statistics New Zealand said on Wednesday (Apr 24) in Wellington. That’s the weakest since the three months ended July 2021 and down from a peak exceeding NZ$25 billion in late 2022.

Slowing demand for imports is a symptom of a sluggish economy, as both households and companies feel the weight of high interest rates. Gross domestic product contracted in the second half of 2023 – pushing the nation into a double-dip recession – and a recent business opinion survey highlighted the risk of a hard landing in 2024.

The Reserve Bank of New Zealand kept the Official Cash Rate at 5.5 per cent this month, and said it needs to keep policy restrictive for a sustained period to return inflation to its 1 to 3 per cent target band. Consumer prices rose 4 per cent in the year to March.

Today’s report shows across-the-board declines in most imports with vehicles dropping 18 per cent from the year-earlier quarter, machinery declining 12 per cent and fuel falling 29 per cent.

Capital goods imports dived 25 per cent, reflecting a reluctance to invest as business confidence slumped.

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Imports in March plunged 25 per cent from a year earlier, although the prior period included the purchase of a jetliner and unusually high fuel shipments.

Imports in the year ended Mar 31 dropped 11 per cent from a year earlier, outpacing a 4.2 per cent drop in the value of exports. The annual trade deficit narrowed to NZ$9.87 billion, the smallest since May 2022. BLOOMBERG