New Zealand Treasury half-year update out now;

  • New Zealand sees 2014/15 OBEGAL (operating balance before gains and losses) of NZ$-0.6 billion (PREFU (Pre-election Economic and Fiscal Update)) NZ$+0.3 bln)
  • 2015/16 OBEGAL surplus NZ$0.6 bln (PREFU NZ$0.8 bln);
  • 2016/17 OBEGAL surplus NZ$2.6 bln (PREFU NZ$1.9 bln)
  • Sees 2014/15 net debt 26.5 pct of GDP (PREFU 26.8 pct)
  • Sees net debt declining to 22.5 pct GDP by 2019
  • Sees 2014/15 cash balance nz$ -4.0 bln (PREFU NZ$-4.6 bln); 2015/16 nz$-3.5 bln (PREFU NZ$-2.9 bln)
  • Sees March 2015 yr GDP at +3.5 pct (HYEFU (Half-Year Economic and Fiscal Update) +3.8 pct); March 2016 gdp +3.4 pct (HYEFU +3.0 pct)


  • New Zealand Treasury reduces 2014/15 GDP forecast, raises later year on stronger domestic activity, migration
  • Lowers inflation forecasts through to 2018
  • Expects dairy price weakness to continue in coming months, sees recovery over 2015
  • High NZD a headwind to growth; TWI at around 76.6 until early 2017, tTWI wi at 73 mid-2019

Comments from New Zealand finance minister English:

  • Says budget surplus still achievable in 2014/15 despite new forecast of deficit
  • Won’t engage in slash and burn spending cuts to achieve budget surplus this year
  • Says the government is aiming to reduce net debt level to below 20 pct GDP by 2020
  • Says aiming to have NZ$2.5 bln available in 2017 for possible tax cuts

Headlines via Reuters

NZD …. not a lot of reaction at all