New Zealand will unleash billions of stimulus dollars at its annual budget this week to cushion the economic blow from the coronavirus pandemic, leaving it with ballooning debt and a dismal fiscal position that will take years to fix.
FILE PHOTO: New Zealand Prime Minister Jacinda Ardern during a news conference prior to the anniversary of the mosque attacks that took place the prior year in Christchurch, New Zealand, March 13, 2020. REUTERS/Martin Hunter
The government has already pumped NZ$20 billion into the economy, largely through wage subsidies to limit job losses. Economists are expecting fiscal support to be doubled, at least. The spending would mean an operating deficit of about NZ$30 billion, or nearly 10% of gross domestic product in the 2021 fiscal year, economists said, while debt would spike higher.
Bond issuance will spike to around NZ$145 billion over the next few years, he said, NZ$100 billion more than a projection made in December.Prime Minister Ardern has garnered global praise for her leadership amid the pandemic, with the country recording only 21 deaths from coronavirus, among the lowest tolls in the world.
In neighbouring Australia, the government postponed its annual budget to October from May, as the coronavirus cast massive uncertainty over economic projections.
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