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While New Zealand’s economy contracted in 2020, it is forecast to rebound strongly in 2021, outperforming regions we compare ourselves to like the Eurozone, the UK, and Japan,” Finance Minister Grant Robertson said Wednesday while presenting the half-year fiscal and economic update, according to Bloomberg.

Robertson said that the government’s decision to act quickly in response to the global Covid-19 pandemic has contributed to a better than expected economic recovery. 

Economic forecasts

The Treasury Department forecasts annual average growth of 1.5% in the year through June 2021 versus 0.5% three months ago. 

Budget deficits are now seen falling from NZ$21.6 billion, or 6.7% of GDP next year, to NZ$4.2 billion, or 1% of GDP, in 2025. 

Unemployment to peak at 6.9% at the end of next year versus 7.8% predicted in September.

Bond issuance for 2020-21 has been cut by NZ$5 billion to NZ$45 billion.