FX.co ★ New Zealand’s Terms of Trade Index Shrinks to 2.1% in Second Quarter

New Zealand's Terms of Trade Index has exhibited a significant decline, dropping to 2.1% in the second quarter of 2024, according to the latest data update released on September 2, 2024. This figure marks a notable decrease from the previous indicator of 5.1% observed in the first quarter of the year.

The Terms of Trade Index measures the relative price of a nation's exports compared with its imports. The sharp reduction from 5.1% to 2.1%, representing a quarter-over-quarter analysis, suggests that New Zealand faced challenges in maintaining the favorable export prices it enjoyed earlier in the year. This shift could reflect various underlying factors such as global market trends, currency exchange rates, or changes in international demand and supply dynamics.

The drop in the index highlights the need for strategic adjustments in New Zealand’s trade policies to bolster its export competitiveness and mitigate the impacts of fluctuating global market conditions.