NZ: Focus on Half-Year Fiscal and Economic Update - Westpac

Analysts at Westpac, note that the Pre-Election Economic and Fiscal Update (PREFU) in August projected growing surpluses and falling debt over the next few years for NZ economy.

Key Quotes

“The HYEFU will need to incorporate two significant changes.

• The first is the new Labour-led Government, which has promised additional spending in areas such as health, education, regional development and infrastructure.
• The second is that the Treasury is likely to revise down its very optimistic forecasts of economic growth, which means a lower expected tax take.”

“With the Government still aiming to reduce net debt to 20% of GDP, it may have to meet its election promises through spending cuts elsewhere or additional sources of revenue.”