Figures released yesterday indicate New Zealand’s purchasing power with the rest of the world has hit new highs.
Helping drive the official figures were record lamb and butter prices.
Radio New Zealand said official figures show the terms of trade - or the quantity of imports that can be bought with a given quantity of exports - rose by 0.8% in the December quarter.
Radio NZ said that beat the previous record high set in the September 2017 quarter. Before then, the last high for the terms of trade was the June 1973 quarter.
The December quarter rise was due to export prices rising faster than import prices. Export prices rose 4.9% and mainly reflected high lamb prices, which rose 12% to their highest-ever level. Dairy prices also surged, with forestry and wool also contributing to the rises.
“Dairy prices have been generally high in 2017, with butter rising 11% in the December 2017 quarter to reach a new peak,” said Statistics New Zealand business prices manager Sarah Williams.
“Export prices for butter have nearly doubled since September 2016, up 93%.”
Import prices rose 4%, largely due to more expensive crude oil and fuel.
Radio NZ said analysts were saying the terms of trade should remain strong.
“We're adding more value to the products we produce, but also the world is going through a global upswing at the moment and that's reflecting strong demand conditions,” said ANZ Bank senior economist Philip Borkin.
He said outside of commodity price moves, inflation globally remains subdued.