The government forecasts a narrower 2025/26 deficit of NZ$15.06 billion but downgrades 2026/27 GDP growth to 2.3%.
New Zealand’s 2025/26 budget deficit is projected at NZ$15.06 billion, an improvement from the NZ$16.93 billion forecast in December. The 2026/27 deficit is expected to widen to NZ$14.09 billion, up from NZ$12.99 billion previously estimated.
The Treasury downgraded 2026/27 GDP growth to 2.3% from 3.4% in December, while inflation is projected to peak at 4.0% in Q2 2026. Net debt is forecast to peak at 46.1% of GDP in 2027/28, slightly lower than the prior 46.9% estimate.
Gross bond issuance for 2026/27 remains unchanged at NZ$34 billion, though four-year issuance to June 2030 was trimmed to NZ$124 billion from NZ$130 billion. A new prudential levy on financial institutions is expected to raise NZ$209 million over four years.