New Zealand fiscal outlook darkens as finance minister Willis sticks to discipline

New Zealand's government indicates a prolonged fiscal strain with no return to budget surplus expected over the next five years. Finance Minister Nicola Willis emphasized spending restraint while recognizing a fragile economic recovery. Recent data suggest the economy is stabilizing after a prolonged downturn. Despite a cautious optimism regarding near-term GDP, the outlook remains complicated by weak domestic demand and external uncertainty, including global risks. Updated forecasts show a wider deficit than previously expected and indicate that net government debt will peak higher than earlier projections. With fiscal settings tight, the NZD is likely to remain influenced more by global rate differentials and risk sentiment than domestic fiscal signals.