New Zealand Treasury says it expects to downgrade its economic and fiscal forecasts relative to Budget 2024 when it provides a half-year update next month, as the recession has been worse than expected. Weaker economic growth means a smaller economy and less tax revenue, increasing the challenge for the Government in balancing its books”. Productivity hits zeroStephens said the “deteriorating economic outlook” was not only because of a deeper recession, but also because of a sustained productivity slowdown. “As this reality has slowly been revealed by the data over the past two years, the Treasury has lowered trend productivity in successive forecasts,” Stephens said. Stephens said each downward revision of economic growth forecasts made it harder for the Government to bring its revenue and expenditure back into balance.

Source: New Zealand Herald November 21, 2024 02:26 UTC