Public Debt in New Zealand
New Zealand - Public Debt
Government approves massive budget stimulus to buttress economy ahead of September elections
On 14 May, the government unveiled an NZD 50 billion (USD 30 billion) stimulus package, largely focused on supporting employment in an effort to kickstart the economy following the impact of the coronavirus outbreak and consequent lockdown. The budget, which will be spent over a four-year period, is the largest in New Zealand’s history. Moreover, on the heels of previously adopted measures to support the economy, it takes total crisis spending to over NZD 62 billion (over USD 37 billion) or around 21% of GDP.
The package sets the stage for Prime Minister Jacinda Ardern’s re-election campaign ahead of the September poll and is aimed at cushioning massive unemployment caused by lockdown measures by allocating funds to re-train workers, support wages and infrastructure spending. As for job policies, measures include additional investment in education and training; the extension of the wage subsidies scheme; and funds for nature-based jobs to improve the quality of the environment. Moreover, the package scales up funding for infrastructure investment, healthcare, public housing and tackling poverty.
Although the hit from the lockdown will be especially severe in Q2, afterwards the recovery should start at a sustained pace, also thanks to the significant stimulus package and as the government has already lifted the toughest containment measures. While the stimulus package will raise the public debt and deficit significantly, it should not pose significant fiscal risks given the country’s healthy fiscal metrics.
FocusEconomics panelists project the economy to contract 4.8% in 2020, which is down 5.6 percentage points from last month’s estimate, and to grow 5.0% in 2021.
New Zealand - Public Debt Data
|Public Debt (% of GDP)||35.1||33.7||31.8||30.4||28.1|
5 years of economic forecasts for more than 30 economic indicators.
New Zealand Facts
|Bond Yield||1.67||1.20 %||Dec 30|
|Exchange Rate||0.67||-1.69 %||Jan 01|
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November 24, 2021
At its 24 November meeting, the Reserve Bank of New Zealand (RBNZ) decided to hike the official cash rate to 0.75% from 0.50%, marking the second consecutive increase.
November 12, 2021
The ANZ bank business outlook indicator dropped in November.
November 10, 2021
The ANZ-Roy Morgan consumer confidence indicator fell to 98.0 in October from September’s 104.5.
November 4, 2021
The seasonally-adjusted unemployment rate fell to 3.4% in Q3 from 4.0% in the previous quarter, logging the lowest print since Q3 2007.
October 25, 2021
Consumer prices soared 2.2% from the previous quarter in Q3, coming in above Q2’s 1.3% jump.