NZ government raises 2016/17 budget surplus forecast, cuts GDP projections

[WELLINGTON] The New Zealand government more than doubled its forecast for a budget surplus in 2016/7 on a one-off spike in tax revenues, even as it cut its growth calculations for this fiscal year and next.

The government raised its budget surplus forecast to NZ$3.706 billion (S$3.13 billion) in the year to June because of strong corporate tax revenues, up from a prior forecast of NZ$1.62 billion in its May budget economic and fiscal update.

It reduced its economic growth calculation for the year to June to 2.6 per cent from 3.2 per cent previously, and cut its growth projection of 3.5 per cent in the year to June 2018 from 3.7 per cent in the May budget update.

Wednesday's budget surplus will be welcome windfall for the National Party government only weeks before a Sept 23 election that has become tightly contested after a change in leadership boosted support for the Labour Party.

REUTERS