New Zealand on Thursday forecast a narrower budget deficit of NZ$14.74 billion for the fiscal year ending June 30, 2025, down from a NZ$17.32 billion shortfall projected in its half-year fiscal update in December.
The improved outlook reflects a focus on fiscal prudence amid a global tariff war.
Operating spending for 2025 is expected to average NZ$1.3 billion per annum—the lowest in a decade.
Meanwhile, net debt excluding advances is forecast to peak at 46% of GDP in 2027/28, slightly lower than the 46.5% peak projected for 2026/27 in the December update.
At the same time, the New Zealand Debt Management Office (NZDMO) lowered its near-term bond issuance plans.
Gross bond issuance for the 2025/26 fiscal year is expected to total NZ$38 billion, down from NZ$40 billion projected in December.
However, the government raised its total bond issuance forecast for the four-year period ending June 2029 to NZ$132 billion, up from NZ$128 billion in the earlier projection.