New Zealand Budget Deficit Revises Down Amid Improved Economic Forecast

New Zealand's pre-election economic forecast is looking rosier than expected, according to the government's latest figures. The country's budget deficit for the fiscal year ending June 30, 2027, has been revised down from $NZ11.9 billion to $NZ8.6 billion ($A7 billion).

The governing National party says it will keep a tight fiscal leash and aims to return to surplus by 2028/29, which is now predicted to hit $NZ4 billion.

Finance Minister Nicola Willis hailed the improvement in the economy as 'welcome news', saying it frees up more money for New Zealanders and puts the country in a stronger position to weather global uncertainty.

However, senior economist Mark Smith from ASB warned that the forecasts have an 'aspirational' feel due to the challenging global environment. He also cautioned against generous fiscal pledges that are not fiscally sustainable.