ℕ𝕖𝕨 ℤ𝕖𝕒𝕝𝕒𝕟𝕕'𝕤 𝕖𝕔𝕠𝕟𝕠𝕞𝕚𝕔 𝕠𝕦𝕥𝕝𝕠𝕠𝕜 '𝕤𝕥𝕒𝕓𝕝𝕖', 𝕣𝕖𝕥𝕒𝕚𝕟𝕤 𝔸𝔸𝔸 𝕒𝕟𝕕 𝔸𝔸+ 𝕔𝕣𝕖𝕕𝕚𝕥 𝕣𝕒𝕥𝕚𝕟𝕘𝕤

𝔾𝕝𝕠𝕓𝕒𝕝 𝕣𝕒𝕥𝕚𝕟𝕘𝕤 𝕒𝕘𝕖𝕟𝕔𝕪 𝕊𝕥𝕒𝕟𝕕𝕒𝕣𝕕 & ℙ𝕠𝕠𝕣'𝕤 (𝕊&ℙ) 𝕙𝕒𝕤 𝕒𝕗𝕗𝕚𝕣𝕞𝕖𝕕 ℕ𝕖𝕨 ℤ𝕖𝕒𝕝𝕒𝕟𝕕'𝕤 𝔸𝔸𝔸 𝕝𝕠𝕔𝕒𝕝 𝕔𝕦𝕣𝕣𝕖𝕟𝕔𝕪 𝕒𝕟𝕕 𝔸𝔸+ 𝕗𝕠𝕣𝕖𝕚𝕘𝕟 𝕔𝕦𝕣𝕣𝕖𝕟𝕔𝕪 𝕔𝕣𝕖𝕕𝕚𝕥 𝕣𝕒𝕥𝕚𝕟𝕘, 𝕤𝕒𝕪𝕚𝕟𝕘 𝕥𝕙𝕖 𝕠𝕦𝕥𝕝𝕠𝕠𝕜 𝕗𝕠𝕣 𝕥𝕙𝕖 𝕔𝕠𝕦𝕟𝕥𝕣𝕪 𝕚𝕤 𝕤𝕥𝕒𝕓𝕝𝕖.

S

&P said it expected the country's fiscal deficit to narrow over the next three years as Covid-19-related spending measures came to an end.

"Net general government debt will stabilise at a level that is modest compared with that of most highly rated sovereign peers," S&P said.

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"New Zealand has tipped into recession, and higher interest rates will dampen growth. However, a slowing economy should constrain demand for imports, helping to alleviate the current account deficit."

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The ratings agency said the stable outlook on its long-term credit ratings on New Zealand reflected its high assessment of various factors relating to the country.

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"The country's excellent institutions, wealthy economy and moderate public indebtedness will balance credit risks associated with a large current account deficit, high levels of external and private-sector debt, and volatile property prices over the next two years."

However, S&P said it could lower its ratings on New Zealand if the fiscal deficit did not narrow as forecast, which would push up government debt and interest costs; if the country had "persistently weak current account deficits"; or if growth was "materially weaker" than other developed nations on a regular basis.

On the upside, S&P said it could raise its rating if New Zealand's financial metrics "materially strengthen".

"Indications of this strengthening would include the general government deficit contracting to less than 3 percent of GDP (gross domestic product), and net general government debt or interest expenses falling on a structural basis to less than 30 percent of GDP and 5 percent of government revenues, respectively."

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S&P also forecast New Zealand's economic growth to slow to 0.2 percent in 2024 and average about 2.5 percent per year over the subsequent years.

It expected the country's annual inflation rate to gradually fall to the Reserve Bank's 1-3 percent target band over the next years.

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