WELLINGTON (Reuters) – New Zealand's finance minister, Nicola Willis, warned in a speech on Thursday that a worsening economic outlook means the country is set to post a wider budget deficit next year.
Finance Minister Willis told the Employers and Manufacturers Association in Auckland ahead of the Government's budget and financial outlook release on May 30 that the deteriorating economic outlook had made debt reduction efforts much more difficult.
“But as the Florence and the Machine lyric I recently quoted goes, it's darkest before the dawn. The deficit is expected to be bigger next year than this year, and then start to improve,” Willis said. he said.
The government's semi-annual economic update in December predicted an operating deficit of NZ$6.14 billion ($3.75 billion) in 2024-25, excluding profit and loss, for the year ending June 30. This improved from the expected deficit of NZ$9.32 billion.
However, since then the economic situation has deteriorated and we are now in a technical recession.
Willis said details of the government's plans to return the books to surplus, as well as operating provisions for future budgets, would be announced next week.
“These allowances represent the amounts available for discretionary spending and revenue planning in the budget for the next three years.”
(1 dollar = 1.6375 New Zealand dollars)
(Reporting by Lucy Kramer; Editing by Christopher Cushing)
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