NZ Government Forecasts Smaller Budget Deficit Ahead of Election

New Zealand Prime Minister Christopher Luxon pointed to an improving fiscal position and stronger-than-expected economy as evidence of his government's economic management credentials.

The government on Tuesday forecast a smaller budget deficit and lower debt than projected in its May Budget, while striking an upbeat tone on growth in an economic outlook closely watched by voters concerned about living costs ahead of the November 7 election.

Treasury forecast an operating balance before gains and losses (OBEGAL) deficit of NZ$8.73 billion ($4.94 billion) in the fiscal year ending June 30, 2027, compared with a NZ$14.09 billion deficit forecast in May.

Luxon said the economic and financial forecasts were good news and the result of hard work from his centre-right National Party-led government.