New Zealand forecast a budget deficit of NZ$11.07($7.04 billion) for the fiscal year ending June 30 2024,
- wider than a deficit of NZ$9.32 billion forecast in its half-year fiscal update in December.
Treasury inflation forecasts:
- falling below 3% in Q3 this year
- to 2% around 2026
- sees a contraction in GDP in H1 of 2024, return to growth in H2 of this year
NZD/USD is little changed:
Tax relief for Kiwis has contributed to the wider deficit and is a fiscal stimulus for the year ahead. This is not a desired outcome for the Reserve Bank of New Zealand trying to drive inflation down.