The boom in tourism has underpinned a surplus in the balance of payments and offset lower export earnings.
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Statistics New Zealand said the actual surplus for the three months ended March was $1.3 billion, which was better than expectations, which compared with a deficit of $2.9bn in the previous quarter.
The annual deficit narrowed by $500 million to $7.5bn, 3 percent of gross domestic product, which was the lowest since the end of 2014.
"This is probably as good as the current account deficit is going to look in the near future," said Westpac senior economist Michael Gordon.
He said spending by record numbers of tourists, around 3.3m over the past year, has been a strong element in keeping the deficit in check.
"That's been a really big plus ... it's not entirely offsetting the dairy downturn but it's been a really important offset for the country."
Spending by international visitors increased $2.2bn in the year ended March 2016, to a record annual high of $13.3bn.
The balance of payments broadly measure the country's ability to pay its way in the world.
The country's net liabilities position, an indicator of the country's indebtedness, increased by more than 3 percent to $157bn, the highest since March 2009.
The increase reflected a rise in the value of overseas investment in the sharemarket, while a fall in the New Zealand dollar raised the value of the country's liabilities.
