Statistics New Zealand yesterday dashed any hopes that New Zealand's current account had slipped back into the black for the first time in nearly 30 years in the three months ended March.
Most forecasters and economists were predicting that a flood of reinsurance money flowing into the country would push the current account deficit into surplus, albeit briefly.
However, Statistics NZ said reinsurance inflows from the September and February earthquakes would be treated as capital transfers, instead of current transfers, because the impact was capital, rather than current in nature.
ASB economist Jane Turner said, as a result of that change, the reinsurance flows would no longer affect the current account.
Previously, Statistics NZ had made an allowance for reinsurance costs in the September quarter of $3.56 billion.
Removing that revised the third-quarter current account to a deficit of $3.6 billion, she said.
"According to our estimates, the annual current account deficit in the third quarter will stand at 4.1% of GDP, previously 2.2% of GDP."
In addition, the ASB forecasts for the March quarter current account balance had also changed from those previously published, Ms Turner said.
ASB now expected a deficit of $1.36 billion, from a previously forecast surplus of $3.6 billion. That would bring the annual deficit to $9.5 billion, or 4.8% of GDP.
The official figures will be released tomorrow morning.
Prime Minister John Key said the Government estimated the earthquakes would cost between 8% and 9% of national economic output (GDP).
"On our estimates, this is the single biggest impact of any natural disaster on any developed economy we can find. It is going to cost in the order of 8% to 9% of GDP, round about $25 billion dollars, so it's a very major event," he told reporters in Australia.
