Net core Crown debt now $2.8 billion lower than forecast in Budget
Thursday, 2 July 2026
The Treasury’s latest update on the public finances is very encouraging and supports other evidence the economy is recovering, Finance Minister Nicola Willis says.
“All the indications are that the conflict in the Middle East slowed growth in the second quarter of this year, but that the economy is already regaining the momentum it had developed before the conflict began,” she said.
The Government’s operating (Obegal) deficit was just over $9.5 billion for the 11 months to the end of May, which is historically very high but almost $3.4b lower than forecast in the Budget.
Net core Crown debt stood at just over $186b at the end of the month, $2.8b lower than forecast.
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The operating deficit essentially maintained an improvement recorded in the April accounts, while the debt figure extended better-than-expected figures recorded that month.
In its commentary, the Treasury said key indicators in May were stronger than forecast.
It put that down to a combination of higher-than-expected tax revenue, above-forecast income from the Emissions Trading Scheme as a result of businesses surrendering carbon credits, favourable results from Crown companies and government expenses being lower than expected.
The accounts were published against the backdrop of higher confidence among economists that an economic recovery has resumed in the wake of signs of de-escalation in the Middle East conflict.
The next set of accounts that will be released will be the audited figures for the year to the end of June, which are due to be published in October.
Willis said today’s figures indicated they would also be in better shape than forecast at Budget.