New Zealand’s economy is showing signs of recovery, as stated in the Pre-election Economic and Fiscal Update. Projections indicate that the country is on track for growth, avoiding a recession, with wages outpacing inflation and increased employment. However, the report acknowledges that challenges persist, particularly due to global economic conditions and the impact of recent natural disasters.
New Zealand has faced economic ripples from the global pandemic, and earlier this year, it experienced its second-largest natural disaster. While core tax revenue has increased compared to the previous year, it still lags behind the May budget forecasts. Despite these challenges, New Zealand’s debt levels remain among the lowest globally and well below the government’s debt ceiling of 30 percent.