New data showing New Zealand's current account deficit has hit a five-year low is encouraging, but more work is needed to narrow our trade and investment gap with the rest of the world, Finance Minister Bill English says.

Balance of payments data shows New Zealand's annual current account deficit shrank from a revised 8.1 per cent of GDP in the year to March 31, to 5.9 per cent in the year to June 30.

"News our current account deficit has hit a five-year low is positive. However this has occurred on the back of a big fall in imports and a drop in company profits flowing offshore - largely in the banking sector," Mr English says.

"If we want a strong recovery that provides sustainable jobs and growth we need to lift our export performance, which has remained relatively static.

"This Government has set out a comprehensive programme to rebalance our economy around exports and investment.

"This will be assisted by Fonterra today lifting its forecast payout to dairy farmers from $4.55 to $5.10 per kilo of milk solids.

"As we move out of recession, we need businesses to have the confidence to invest and create jobs. The Government's role is to make that as easy for them as possible - particularly with the New Zealand dollar at current high levels.

"After a decade of lost opportunity, it is important to tackle these medium and long-term challenges head on. That is why this Government is taking the steps to improve our long-term economic performance," Mr English says.