NZ Government Forecasts Smaller Budget Deficit Ahead of Election

New Zealand Prime Minister Christopher Luxon touted an improving fiscal position and stronger economy as evidence of his government's economic management credentials ahead of the general election.

The government forecast a smaller budget deficit and lower debt than projected in its May Budget, with Treasury predicting 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.

This is down from a NZ$14.09 billion deficit forecast in May, with the government now expecting to return to an OBEGAL surplus in 2028-29, a year earlier than projected.

Luxon credited his centre-right National Party-led government and finance minister for responsible economic management that has enabled these positive forecasts.