The annual current account deficit has edged lower, largely because of a stronger goods surplus and a smaller services deficit.
The deficit fell to $10.1 billion, or 4.8% of gross domestic product (GDP), in the year to March, from $10.5 billion, or 5% of GDP, in the year to December.
ASB economist Jane Turner said the goods balance was expected to receive a temporary boost from stronger dairy export prices over the coming year.
''Beyond this, we expect the goods balance to remain steady and in surplus.''
The terms of trade were likely to stabilise at a reasonably elevated level, she said.
While the gradual recovery in the New Zealand economy would support import growth, that growth was expected to be matched by improved export performance as the global economy continued to recover and Chinese demand remained firm.
''As a result, we expect a slight widening in the current account deficit to around 5.5% of GDP by the end of 2015,'' Ms Turner said.
Westpac economist Nathan Penny said the drought would hit export volumes in the June quarter, widening the deficit.
As the dairy price spike flowed through in the September quarter, the deficit should recover its lost ground.
From 2014, the deficit was universally expected to widen over a couple of years as the Canterbury rebuild generated demand for imports and profits of foreign-owned New Zealand firms improved in line with stronger economic growth, he said.
There was no market reaction after the release.
At a glance
• The current account deficit for the year to March narrowed from 5% to 4.8% of GDP.
• The goods trade surplus improved slightly in seasonally adjusted terms, as dairy volumes increased while import values were flat.
• Exports of services were marginally stronger than expected, as spending by overseas visitors rose.
• Reinsurance claim settlements proceeded at a slightly slower pace compared with last year, with $1.01 billion settled in the March 2013 quarter.
