The New Zealand government releases its half year Fiscal and Economic Update today, due at 0000GMT
A couple of previews via banks.
ASB:
- We expect the Half-Year Economic and Fiscal Update to show a healthy set of Government accounts. The 2017/18 end of year accounts produced a pleasant surprise for the Government, with net debt dipping below 20% of GDP four years ahead of target. This surprise has freed up the Government to both increase spending allowances, and, at the same time, continue to maintain a strong fiscal position.
- Translating this into numbers, we expect a modest improvement in the forecast operating balances, with annual surpluses of at or around 2% of GDP. Similarly for net debt, we anticipate the Government to maintain debt at or around 20% over the forecast period.
- These forecasts also mean that the Government's bond programme is likely to be largely unchanged from Budget 2018 levels. This update will also contain more information on how the Government intends to build the Living Standards Framework into Budget 2019. At a basic level, the Government plans to incorporate a broader suite of indicators into its annual reporting, including things like social and natural capital along with the usual economic and financial measures.
Westpac:
- The HYEFU provides an update of the Government's economic and fiscal projections for the next five years. It will also provide some guidance on the priorities for next year's "Wellbeing Budget".
- The June 2018 fiscal year saw a significantly larger surplus and lower net debt than forecast, putting the Government well within its Fiscal Responsibility Rules. Some of the surprise was due to a stronger than expected tax take, but much of it was due to an unintentional shortfall in spending. Since June we have seen some catch-up in spending, which could mean a lower surplus forecast for this year and a similar net borrowing requirement.
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I had a question earlier on expectations for the surplus - I have not been able to nail down an expected for this
