New Zealand's budget deficit shrinks sharply on economic rebound
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New Zealand's budget deficit shrinks sharply on economic rebound
New Zealand's government on Tuesday reported a marked improvement in its finances thanks to a surprisingly brisk recovery for its economy, though a fresh coronavirus outbreak has since clouded the outlook somewhat.
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The New Zealand Treasury said it had a budget deficit of NZUS$4.6 billion (US$3.2 billion) in the year to end June 2021, compared with a shortfall of NZUS$15.1 billion forecast just a few months ago in May.
Revenue was higher and expenditure lower than forecasted as economic activity rebounded strongly and unemployment fell much more quickly than expected.
That allowed the government to borrow less than planned so that net core debt amounted to 30per cent of gross domestic product, instead of the 34per cent originally forecast in the 2020/21 budget.
Minister of Finance Grant Robertson said the current year would be impacted by the recent outbreak of the Delta variant that has forced a lockdown of the country's largest city, Auckland. -
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