New Zealand's yearly account deficit was tapered off to its smallest amount in more than 20 years in the fiscal year to March, as exports grew and foreign investors declined.

The shortfall finished weakly at $3.1 billion (NZ$4.46 billion) in current fiscal year ended March 31 bouncing from $1.6 billion (NZ$5.31 billion) in the previous year, said Statistics New Zealand in Wellington today.

In the fiscal quarter ended March 31, the current account surplus posted at NZ$176 million, compared with an updated NZ$3.41 billion deficit in the year's last quarter. Economists predicted a NZ$550 million shortfall.

The annual account, the most comprehensive trade measure because it covers investment and services, was tapered off for the fifth consecutive quarter. Governor Alan Bollard of the Reserve Bank of New Zealand predicted the annual account deficit would increase in 2010 as a rise in domestic demand attracts imports foreign investors post widened profits.

"Looking forward, the accounts will only start to expand again," commented senior economist Craig Egbert of the Bank of New Zealand Ltd. at Wellington. "A lot of this improvement has been cyclical. There is still a big structural issue in there that will reveal itself over the coming years."

The current shortfall was 2.4% of GDP, lower than the 2.9% in the fiscal year ended December 31, said the statistics bureau. The shortfall posted at its smallest since September 1989.