WELLINGTON, Sept. 29 (Xinhua) -- New Zealand's economy is projected to strengthen while the government's fiscal position improves, Finance Minister Nicola Willis said on Tuesday, citing the Treasury's pre-election economic and fiscal update.
Willis said in a statement that the deficit in the year ending in July was 3.4 billion NZ dollars (about 1.9 billion U.S. dollars) smaller than forecast in the May budget, reflecting stronger economic momentum.
Treasury forecasts show the operating balance deficit shrinking from 11.4 billion NZ dollars forecast in the budget to 6.8 billion NZ dollars this financial year and to less than 1 billion NZ dollars next year. The surplus is then forecast to grow from 4 billion NZ dollars to almost 12 billion NZ dollars over the following three years.
The economy is forecast to grow at an average annual rate of 2.6 percent, with 220,000 more jobs expected to be created and wages rising faster than prices, according to Willis.
Debt is forecast to start declining as a share of the economy in 2028/29 and fall in dollar terms in 2030/31, marking the first such decline since 2017/18, she said.
The improved outlook means the government is expected to borrow 15 billion NZ dollars less over the next four years through reduced bond issuance, on top of a 6 billion NZ dollar reduction in forecast borrowing in the budget, the minister said.
She noted that the outlook still faces risks from ongoing instability in the Middle East and urged the government to maintain fiscal discipline. ■
