New Zealand government boosts spending, forecasts debt reduction

New Zealand's Labour-led government has unveiled a budget that includes NZ$3.8 billion of new capital investments.

Key points (Source: Reuters)

GDP growth to a peak of 3.8 percent in 2019, underpinned by the increased government expenditure.

Operating surplus is expected to rise to NZ$3.14 billion for the year ending June, up from NZ$2.54 billion previously forecasted.

The surplus is forecast to rise to NZ$7. 32 billion at the end of the budget estimates period in 2021-22.

The debt-to-GDP ratio is seen falling to 19.1 percent by 2022.

NZ's Debt Management Office (DMO) will increase bond issuance by NZ$1 billion a year for the three years ending 2021, taking the total bond issuance to NZ$8 billion a year.