Reviewing Statistics New Zealand's current account figures, Mr Bagrie said New Zealand's international investment position was $152.3 billion in the three months ended September, up $800 million from June but at 64.3% of GDP, well below the most recent peak of 85.9% of GDP in the March 2009 quarter.
The lower New Zealand dollar increased both assets and liabilities. Reduced borrowing by New Zealand companies overseas also contributed to the lowest external debt to GDP ratio since 2003, he said.
The bad news was the quarterly current account deficit widening to $2.5 billion, with the annual current account deficit widening slightly to 2.6% of GDP from 2.5% in June.
The deterioration in the September quarter largely reflected a fall in goods exports relating to the sharp fall in dairy prices, Mr Bagrie said.
''With our goods terms of trade on the way down, it was only a matter of time before this showed up in the external accounts.''
Despite the elevated dollar, the services sector continued to perform well with a $376 million seasonally adjusted surplus in September, down slightly on June.
Lower transportation exports were noted to be behind the fall, with travel services exports also down slightly.
The annual goods and services surplus rose to 2.5% of GDP, its highest since June 2010.
The surprise for economists was the smaller-than-expected income deficit as dividends paid by New Zealand companies to overseas portfolio investors fell.
Mr Bagrie said higher earnings on New Zealand investments abroad also played a part with income earned overseas by New Zealand entities the highest since 2007.
''Despite this, our persistent primary income deficits - formerly named investment income deficits - are the consequence of still-high indebtedness.''
The widening of the annual current account deficit was driven largely by higher profits made by foreign-owned companies in New Zealand, consistent with a strong domestic backdrop, he said.
Although the starting point remained favourable, further falls in the goods terms of trade, the high New Zealand dollar and the domestic demand being central to expansion, looked set to push the annual current account deficit towards 5% to 6% of GDP by the end of next year.
The magnitude of the deterioration was not set in stone and depended on private and government sector saving behaviour.
The question was when would the goods of trade find a floor and at what level would the dollar settle, Mr Bagrie said.
New Zealand's economic growth as measured by gross domestic product, will be released this morning.
