Lots of cheap imports leads to $2.5 billion in revisions to the National Accounts

Tuesday, 2 September 2025

Tariffs could see online retail giants like Temu and Shein stepping up their activity in New Zealand.

A growth in cut-price purchases from Temu and Shein are causing Statistics New Zealand to have to revise its value of imports down, data from the June quarter out today has shown.

The average of value of parcels has declined as a result of the popularity of the fast fashion giants, and it means estimates of the level of consumer spending and imports will now have to be revised down in the National Accounts.

“With the average value of individual parcels declining substantially—attributable in part to the growing presence of new importers such as Temu and Shein in the New Zealand retail sector—Stats NZ now considers that the earlier methodology resulted in a progressive overestimation of import values,” Westpac senior economist Darren Gibbs wrote in a note Tuesday.

Gibbs said at the margin, the revisions “may play into the recent RBNZ narrative regarding the weak state of the household sector.”

That said, it also implied that household dis-saving - or spending more than was earned - in the period was less of a phenomenon than reported previously.”

The result is that the updated figures published this week showed imports for the year ending March were $2.25 billion lower than previously reported, representing approximately 0.5% of GDP, from 5.7% in the March quarter.

Christopher Luxon says economic activity is improving as the latest Ipsos poll shows voters losing faith in the coalition's ability to tackle the cost of living.

But there would be no impact on GDP from these revisions, “although measures of growth in final demand will be revised lower,” GIbbs said.

Negating some of the downward revisions will be upward revisions to net exports of services, and additional changes from new annual benchmarks (including investment income revisions), which could either add to or offset these impacts, expected to be quantified in a release of data on September 17.

More generally, export volumes fell 3.7% in the June quarter, following growth of 4.1% between the December 2024 and March 2025 quarter.

Most major categories of exports were weaker in the quarter, including the majors - dairy, meat and food and beverages. In contrast, import volumes rebounded 4.2% quarter-on-quarter after declines in the previous two quarters. This outcome was driven by stronger growth in transport-related expenditure and passenger car imports among other things.

The merchandise terms of trade - which measures a country's purchasing power for import goods based on the prices it receives for its exports - increased 4.1% from the March quarter to the June quarter – a larger increase that the market had expected, but a smaller increase than Westpac had estimated, Gibbs said.

Export prices rose 0.2% quarter-on-quarter, led by higher prices for meat and dairy products. Lower prices for forestry products and manufacturers weighed on the index, as did an approximately 2% rebound in the trade weighted exchange rate index.

Import prices fell 3.7% quarter-on-quarter, affecting all major import categories, but particularly fuel and other crude materials.