New Zealand finmin says government deficit set to widen in 2024-25 (updated)

RTO

23/05/2024 03:58

(Adds further comments from Finance Minister's speech and
background)
    By Lucy Craymer
       WELLINGTON, May 23 (Reuters) - New Zealand's deficit is
expected to worsen in the coming year as the economic outlook
has deteriorated, finance minister Nicola Willis warned in a
speech on Thursday.
    Willis, who was speaking to the Employers and Manufacturing
Association in Auckland ahead of the release of the government's
budget and fiscal forecasts on May 30, said efforts to reduce
debt had been made much harder as economic forecasts
deteriorated.
    "But in the words from a Florence + The Machine song I
quoted recently, it is darkest before the dawn. The deficit is
expected to be larger next year than it is this year, before
starting to improve," Willis said.
    In the government's half yearly economic update in December,
the 2024-25 operating deficit not including gains and losses was
forecast to be NZ$6.14 billion ($3.75 billion), an improvement
on the forecast deficit of NZ$9.32 billion for the year ended
June 30.
    However, since then the economic situation has deteriorated
with the country now in a technical recession.
    Willis said details of how the government plans to return
the books to surplus would be released next week, along with
operating allowances for future budgets.
    "These allowances represent the amount available in the next
three budgets for discretionary spending and revenue
initiatives." .
    
($1 = 1.6375 New Zealand dollars)

 (Reporting by Lucy Craymer; Editing by Christopher Cushing)
 ((Lucy.Craymer@thomsonreuters.com;))