In December 2016, the current account deficit hit a low of 2.2% of GDP. That has now climbed to 3.3% of GDP.
Without the services balance, particularly the tourism returns, the deficit would have climbed to 5.1% in the three months ended June, BNZ head of research Stephen Toplis said.
''The good news is we expect the services balance to remain solidly in surplus for the foreseeable future. The bad news is we do not see it growing significantly from here, particularly as growth in inbound tourism is increasingly capacity-constrained.''
Driving the balance further into the red had been the weakness experienced in New Zealand exports. By his estimate, goods export volumes were only 0.3% higher in the June quarter than they were a year earlier.
In stark contrast, import volumes soared 8.4%.
In part, the export weakness could be attributed to a weather-related dent in agriculture exports. But, once that had disappeared, there was still not a resurgence in export activity, he said.
Import growth reflected strong domestic demand in New Zealand.
As domestic demand softened, import growth was expected to moderate, but not so much as to reverse the negative trend in the goods balance.
The goods balance had been supported by a soaring terms of trade, but the terms of trade now appeared to be falling.
In yesterday's GlobalDairyTrade auction, the index fell a further 1.3% to be down 14.7% for the year.
The state of the accounts was worse than anticipated. Statistics New Zealand had published revisions for services exports up to the year ended March 2017 which intimated the current account deficit would be revised lower. That had happened.
Unfortunately, the data published yesterday showed revisions in the opposite direction for the period post March 2017, catching economists off guard, Mr Toplis said.
Yesterday's current account data did not change the BNZ view of the gross domestic product (GDP) results due out this morning.
The BNZ was forecasting a 0.6% increase in GDP for the June quarter while others were forecasting a rise of 0.9%.
The deterioration in the current account balance was not yet sufficient to dent the improvement in New Zealand's net international investments position, he said.
Net liabilities were 54.6% of GDP, a far cry from the 82.6% peak reached in March 2009.
