New Zealand government heading toward record cash deficit

Feb 18, 2011, 0:40 GMT

Wellington(dpa) - The New Zealand Government is heading toward a record cash deficit of 15.6 billion New Zealand dollars (11.8 billion New Zealand dollars) in the current financial year, Finance Minister Bill English said Friday.

The government financial statements for the six months ending December 31 were released Friday and show revenue and spending broadly in line with forecasts.

'However, with the cash deficit already sitting at a record 13.2 billion New Zealand dollars (10 billion US dollars) and set to rise to 15.6 billion New Zealand dollars by June 30 - adding to New Zealand's already large stock of foreign debt - there is no room for complacency,' English said.

Retail sales and electronic cards data suggested consumer spending was weaker than expected in the last quarter of 2010, Treasury officials said.

The overall deficit of 1.3 billion New Zealand dollars (1 billion US dollars) was 3.6 billion New Zealand dollars (2.7 billion US dollars) less than forecast, mainly due to government agency investment portfolios performing better than expected.

The government's gross debt rose slightly to 32.5 per cent of gross domestic product or 62.1 billion New Zealand dollars (47 billion US dollars), and net debt was 39.5 billion New Zealand dollars (30 billion US dollars) or 20.7 per cent of GDP.