New Zealand Finance Minister Nicola Willis announced a narrower budget deficit of NZ$15.06 billion for the 2025/26 fiscal year, down from December's forecast of NZ$16.93 billion.
The government targets a surplus by 2029/30. Willis pledged increased capital spending on defense, schools, and hospitals while cutting public service costs and social housing construction.
Despite the improved outlook, critics argue the fiscal tightening stifles an already weak economy. Treasury now expects GDP growth of 2.3% by June 2027, down from 3.4% forecast in December.
Inflation is seen at 4.0% this fiscal year, falling to 1.6% next year. The Middle East conflict and high fuel prices continue to pressure the trade-reliant economy.
