WELLINGTON, Aug. 23 (Xinhua) -- A slightly softer growth forecast is the main feature of largely unchanged New Zealand pre-election fiscal update compared to the budget forecasts three months ago, Finance Minister Steven Joyce said Wednesday.
"The softer growth New Zealand has experienced in the six months to March flows through to a lower starting point in the 2017-2018 year," Joyce said in a release.
The net effect is that growth is slightly lower through the forecast period - averaging 3 percent over the next four years rather than the 3.1 percent predicted in the budget, Joyce said.
The other notable change is that Treasury expects the labor market to be tighter over the next four years, with lower unemployment and stronger nominal and real wage growth, he said.
Treasury forecasts unemployment to drop to 4.3 percent by June 2020 and for the average annual wage to increase from 58,900 NZ dollars (42,539 U.S. dollars) at March 2017 to 65,700 NZ dollars by 2021, a 1,300-NZ dollar per annum improvement on the budget forecast, Joyce said.
Other changes to the forecasts include lower CPI inflation, especially in the 2017-2018 year, and net government debt falling below 20 percent of GDP in the 2020-2021 year.
The government's strong fiscal management means that New Zealand is one of the few OECD (Organization for Economic Cooperation and Development) countries to be posting fiscal surpluses, Joyce said, adding that this hard-won position is underpinning the government's strong economic plan which is delivering jobs and steady real wage growth for New Zealanders.
The large infrastructure spend committed to in Budget 2017 means that residual cash remains broadly in balance until the 2019-2020 financial year, the minister said.
The government annual operating expenditure in these forecasts increases from 77 billion NZ dollars to 90 billion NZ dollars over the next four years, which is "sufficient for significant ongoing improvement in the provision of public services," the minister said. (1 New Zealand dollar = 0.72 U.S. dollar)
