News: UPDATE 1-New Zealand annual current account deficit widens in first quarter

(Adds detail, market reaction and economist quote)

WELLINGTON, June 14 (Reuters) - New Zealand's current account deficit widened to its most in a year as a proportion of gross domestic product in the March quarter, official data showed on Wednesday.

The annual deficit to March came in at NZ$8.132 billion ($5.86 billion), equal to 3.1 percent of gross domestic product, Statisics New Zealand said, the most since the same quarter in 2016.

The result was largely due to a fall in dairy exports, while spending on imports like cars and machinery increased. Foreign investment also dropped as profits at international subsidiaries declined.

"That was really reflecting the slowdown in dairy production in the early part of the March season," said Michael Gordon, acting chief economist at Westpac. "We know the production has recovered since, so I think we will see a pick-up in exports in the next couple of quarters"

Market reaction was muted, with the New Zealand currency edging down to $0.7211 from around $0.7214 before the release.

In the three months to March, New Zealand posted an actual quarterly surplus of NZ$0.244 billion, compared with a deficit of NZ$2.415 billion in the previous quarter, according to Statistics New Zealand.

The seasonally adjusted quarterly deficit was NZ$2.836 billion, the highest since 2008, from NZ$1.693 billion in the previous quarter.

Second quarter current account data will be released on Sept 20, 2017.

($1 = 1.3872 New Zealand dollars)