NZ: Larger surplus - Westpac

Michael Gordon, Senior Economist at Westpac, notes that the New Zealand Government’s financial statements revealed a much larger surplus and lower net debt than expected for the June 2018 year.

Key Quotes

“Some of this was due to higher tax revenue, but the majority was due to unplanned delays in operational and capital spending. While some catch-up is expected, delays in spending tend to persist from year to year.”

“The stronger than expected starting point provides some leeway if economic growth fails to live up to the Treasury’s upbeat forecasts.”

“It also implies that in upcoming fiscal updates the Government could announce even more stimulus for the economy than is already planned.”