New Zealand’s annual trade deficit shrunk to the smallest this year as a slowing economy cools demand for imports.

The deficit was NZ$14.8 billion ($9 billion) in the 12 months through October, Statistics New Zealand said Tuesday in Wellington. That’s the smallest since December 2022 and compares with a record NZ$17.1 billion gap in May.

New Zealand normally runs an annual trade deficit because it needs to import oil, automobiles and many consumer goods that it doesn’t produce. The pace of imports is slowing as high interest rates cool domestic demand.

Imports in the 12 months through October were NZ$84.5 billion, which was the smallest annual tally since September last year, today’s report showed.

Annual imports of plant and machinery fell 2.2% from the year-earlier period, while consumption goods imports rose just 0.3%. The annual total also included nearly NZ$2 billion of aircraft.

The narrower trade deficit adds to signs that the current account deficit, which is a broader measure of trade including investment flows and services such as tourism, will narrow further. The gap was NZ$29.8 billion or 7.5% of gross domestic product in the year through June having reached a record 8.8% of GDP at the end of 2022. 

The trade deficit is narrowing even as annual exports also slow. The value of overseas shipments was NZ$69.7 billion in the year through October, the smallest since August last year.

Dairy exports were unchanged in the year at NZ$20 billion while the value of meat and log exports fell. Prices of New Zealand commodity exports fell 6.8% in October from a year earlier, according to an ANZ Bank index.