New Zealand Sees No Surplus Before 2030

New Zealand projected no return to surplus until 2030, as the impact of a sluggish economy offsets efforts to rein in spending. In its half-year fiscal update released today, the government forecast a wider deficit of NZD 16.93 billion for the current year, compared with NZD 15.60 billion in May, reflecting slower growth, weaker tax revenue, and higher debt costs. The economy has contracted in three of the past five quarters, weighed by tepid consumption and global uncertainty, though Q3 data due later this week is estimated to show an expansion. Treasury sees activity improving over the next 18 months, with Finance Minister Nicola Willis saying the economy needs “fresh air in its lungs” before recovering strongly from 2027. Forecasts point to GDP peaking at 3.4% in 2027 before easing to 2.5%, inflation returning near 2%, and unemployment falling below 5%. Treasury based its outlook on stronger housing, rising migration, and solid exports, but cautioned risks remain on both sides.