The Government has just opened the books ahead of the October 14 election, revealing a surplus has been pushed out a year amid a lower-than-expected tax take.
Grant Robertson, the Finance Minister, said this comes as the global economy slows down, but points to no sign of another recession, solid unemployment numbers and inflation returning to the normal band next year as signs New Zealand's economy is "turning the corner".
There are a lot of numbers in the Pre-election Economic and Fiscal Update (PREFU), but here are some of the key figures you may want to know.
There is a $10 billion deficit in the 2023 year, growing to $11.4 billion in 2024. This will then slowly ease, returning to a surplus of $2.1 billion in 2026/27, a year later than expected.
This delay to surplus has been affected by a lower-than-expected tax revenue. It hit $112.4 billion in the 2023 year, which is up from $108.5 billion last year, but $2.9 billion lower than forecast in the Budget. This has been impacted by a lower corporate tax take.
Core Crown expenses have jumped from $125.6 billion in 2022 to $128 billion. That is $200 million lower than forecast. The response to the North Island weather events, elevated spending on benefits and higher debt servicing has contributed to this.
Gross Domestic Product (GDP) as an annual percentage change will be 3.1 percent in 2023. Over the forecast period, quarterly economic growth will be on average 0.4 percent.
The unemployment rate is 3.6 percent in the June 2023 quater before rising to 5.4 percent in the 2025 June quarter. This will then fall to 4.6 percent in 2027.
The annual Consumer Price Index (CPI) change is at 6 percent, before falling back to the target range by the end of next year.
Net debt will rise from 18.1 percent as a percentage of GDP to 22.8 percent in 2025. It will then slide to 21 percent by the end of the forecast period.
Net migration in the September 2023 quarter is expected to peak close to 100,000, which is 33,000 higher than forecast in the Budget.
