New Zealand reports lower budget deficit in June

New Zealand reported an improvement in its government finances on Tuesday. The development was owed to the country’s quick economic rebound. However, a new COVID-19 outbreak poses a risk on its recovery momentum.

The New Zealand Treasury’s budget deficit stood at NZ$4.6 billion ($3.2 billion) in June. This was lower than a shortfall of NZ$15.1 billion predicted in May.

Among the factors that contributed to the fall were higher revenue and weaker expenditure due to an unexpected recovery in economic activity and lower unemployment.

Lower budget deficit allowed the government to borrow less than planned, cutting the net core debt to 30% of gross domestic product instead of the expected 34%.

Meanwhile, Finance Minister Grant Robertson warned of the new Auckland lockdown’s possible impact on the current fiscal year.

However, he added that New Zealand is still in a great position to assist social and economic recovery and progress due to this year’s Crown accounts.