New Zealand has revised its fiscal outlook, projecting a smaller budget deficit and adjusting bond issuance plans as it navigates a still-challenging economic environment.
On Thursday, the government forecast a budget deficit of NZ$14.74 billion for the fiscal year ending June 30, 2025, a notable improvement from the NZ$17.32 billion shortfall projected in its December half-year update. The narrowing reflects improved revenue expectations and a slightly firmer economic backdrop.
At the same time, net debt is now forecast to peak at 46% of GDP in 2027/28, slightly later but marginally lower than the 46.5% peak in 2026/27 projected last December. The shift suggests a more measured fiscal consolidation path.
The New Zealand Debt Management Office (NZDMO) also trimmed its near-term bond issuance plans. For the 2025/26 fiscal year, gross bond issuance is expected to total NZ$38 billion, down from NZ$40 billion projected in the December update.
However, the government raised its total bond issuance forecast for the four-year period to June 2029 to NZ$132 billion, up from NZ$128 billion. The revision reflects longer-term funding needs amid a broader economic transition and continued infrastructure investment.
Despite the moderated borrowing profile in the near term, officials signaled a continued commitment to fiscal discipline and longer-term debt sustainability.
This article was written by Eamonn Sheridan at www.forexlive.com.New Zealand has revised its fiscal outlook, projecting a smaller budget deficit and adjusting bond issuance plans as it navigates a still-challenging economic environment.On Thursday, the government forecast a budget deficit of NZ$14.74 billion for the fiscal year ending June 30, 2025, a notable improvement from the NZ$17.32 billion shortfall projected in its December half-year update. The narrowing reflects improved revenue expectations and a slightly firmer economic backdrop.At the same time, net debt is now forecast to peak at 46% of GDP in 2027/28, slightly later but marginally lower than the 46.5% peak in 2026/27 projected last December. The shift suggests a more measured fiscal consolidation path.The New Zealand Debt Management Office (NZDMO) also trimmed its near-term bond issuance plans. For the 2025/26 fiscal year, gross bond issuance is expected to total NZ$38 billion, down from NZ$40 billion projected in the December update.However, the government raised its total bond issuance forecast for the four-year period to June 2029 to NZ$132 billion, up from NZ$128 billion. The revision reflects longer-term funding needs amid a broader economic transition and continued infrastructure investment.Despite the moderated borrowing profile in the near term, officials signaled a continued commitment to fiscal discipline and longer-term debt sustainability.
This article was written by Eamonn Sheridan at www.forexlive.com. Read MoreNews
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