New Zealand budget – Treasury forecasts inflation below 3% in Q3 2024

New Zealand forecast a budget
deficit of NZ$11.07($7.04 billion) for the fiscal year ending
June 30 2024,

• wider than a deficit of NZ$9.32 billion forecast in
  its half-year fiscal update in December.

Treasury inflation forecasts:

• falling below 3% in Q3 this year
• to 2% around 2026
• sees a contraction in GDP in H1 of 2024, return to growth in H2 of this year

NZD/USD is little changed:

Tax relief for Kiwis has contributed to the wider deficit and is a fiscal stimulus for the year ahead. This is not a desired outcome for the Reserve Bank of New Zealand trying to drive inflation down.

This article was written by Eamonn Sheridan at www.forexlive.com.