Crown Financial Position Weakens as Treasury Revises Growth Outlook

Finance Minister Nicola Willis has attributed the decline in New Zealand's Crown financial position to Treasury’s downgraded economic outlook. Willis clarified that the government is not responsible for the revision, pointing instead to Treasury retracting earlier “overly optimistic assumptions” regarding productivity and economic growth during the COVID-19 period.

She highlighted that Treasury initially assumed improved productivity trends would persist, but those expectations have now been reconsidered. This adjustment has led to a weaker fiscal position than previously forecast. At the time of writing, concerns remain over the impact of this outlook on New Zealand’s economic recovery, with Willis urging careful fiscal management moving forward.

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