S&P Reaffirms New Zealand's Top-Tier Credit Ratings Amid Improving Growth Outlook

S&P Global Ratings has reaffirmed New Zealand's top-tier credit ratings, citing an improving growth outlook. The agency forecasts annual GDP growth of around 2.5% in fiscal 2027, following a period of sluggish expansion. This recovery is driven by robust export-oriented industries such as dairy, horticulture, meat products, and tourism.

However, domestic conditions remain fragile due to subdued consumer confidence and high living costs. The general government deficit is expected to widen to 5.1% of GDP in fiscal 2027 before gradually improving to below 4% in fiscal 2028. Net general government debt should stabilize at around 38-39% of GDP over the next three years.

New Zealand's monetary policy flexibility, wealthy economy, and strong institutions support its top-tier credit ratings. Nevertheless, external imbalances remain a key weakness, with the current account deficit estimated to be approximately 3.2% of GDP in fiscal 2026.