New Zealand's Finance Minister Announces Gloomy Economic Outlook: A Steep Uphill Expected

The New Zealand Finance Minister has presented a grim forecast for the country's economy. The Treasury foresees rising unemployment and a slowing economic recovery and expects that a return to a budget surplus within the next five years will not be possible. This has raised concerns about the financial condition of the Crown. According to Finance Minister Nicola Willis, the signs of economic slowdown are clear indications that the task ahead is more challenging than previously assumed a year ago. Since taking office, the center-right coalition has been struggling with a deteriorating economic situation, reflected in rising unemployment and lower-than-expected tax revenues. For the third quarter, the Treasury projects a contraction of the economy by 0.1%, but optimistically anticipates a recovery in the fourth quarter and a steady growth trend until 2025. The planned budget deficit for the fiscal year ending June 2025 is higher than previously assumed at NZD 17.31 billion. Interestingly, the government is introducing a new reporting method that analyzes the financial situation without the state accident insurer. With this measure, a budget surplus could theoretically be achieved by June 2029. To stabilize the country's finances, Prime Minister Christopher Luxon's National Party has implemented drastic austerity measures, including cuts in public services and strictly limited budgets. However, there have also been tax reliefs since July. Despite the more frugal budgets, Minister Willis is confident that further savings can still be found.