WELLINGTON, June 1 (Reuters) - New Zealand's terms of trade rose more than expected in the first quarter as oil prices weighed on imports, with the data also defying economists' expectations of soft dairy exports.
New Zealand's terms of trade rose 4.4 percent in the first quarter, data from Statistics New Zealand showed on Wednesday. Economists had been expecting a fall of 0.2 percent, according to the median in a Reuters poll.
Export prices remained unchanged, while imports decreased 4.3 percent.
Economists were expecting export prices to fall 1.5 percent and imports to be down 2.5 percent, according to the poll.
Oil product imports fell 24 percent, Statistics New Zealand said.
"The main driver of the gain was weaker oil and so we see it as a temporary bounce, as obviously oil prices have recovered somewhat, and we remain of the view that the terms of trade has further to fall," said ANZ Senior Economist Philip Borkin.
Import prices excluding oil products fell 1.4 percent. Export prices were steady as dairy exports recovered slightly from recent lows, and meat prices fell from a recent peak in the September 2015 quarter, Statistics New Zealand said.
The New Zealand dollar gained nearly half a percent on the upside surprise and is currently trading at US$0.6790.
OM Financial Limited Foreign Exchange and Derivatives Senior Client Advisor Stuart Ive said the lift was likely to be short-lived, given that oil prices have been recovering steadily.
The terms of trade is a measure of the purchasing power of New Zealand’s exports abroad. The increase means 4.4 percent more goods imports could be funded by a fixed quantity of goods exports than in the December 2015 quarter.
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