Fitch puts negative outlook on NZ credit rating

Saturday, 21 March 2026

Credit ratings agency Fitch has effectively downgraded its credit rating for New Zealand by attaching a “negative outlook” to its “AA+” rating for its foreign-currency sovereign debt.

Fitch had previously attached a stable outlook.

The agency said the negative outlook reflected its view that it was becoming harder to envisage a substantial reduction in government debt after that had been delayed in the past few years.

New Zealand’s net core Crown debt is currently forecast by the Treasury to peak at 46.9% of GDP in the year to June 2028.

Fitch said New Zealand’s general debt-to-GDP ratio had increased substantially over the past six years as the economy had been buffeted by a number of shocks.

The warning shot from the ratings agency comes after the OBEGALx surplus was pushed back another year to 2030 in Treasury’s Half Year Economic and Fiscal Update.

“This follows repeated delays in the target year since December 2022 under successive governments. The delays are due to weak economic growth since then and expenditure proving more persistent than anticipated,” Fitch said

“Significant fiscal consolidation measures are likely to occur only after the 2026 election, adding uncertainty to the fiscal outlook,” Fitch said in its commentary to the revised outlook.

“The main change based on the election outcome could be the composition of the consolidation. The incumbent National Party-led coalition focuses on expenditure constraint, while a Labour Party coalition would emphasise revenue measures,” it said.

'Fitch Rating's decision to place New Zealand’s AA+ long-term credit rating on negative outlook is a reminder of why fiscal discipline is so important,“ Finance Minister Nicola Willis said in a statement on Saturday morning.

“The Government remains committed to achieving its three fiscal goals – reducing spending as a proportion of GDP, returning the headline operating balance measure to surplus and bending the debt curve down.”

Willis said that Treasury forecasts prepared before the war in Iran showed an improving outlook, but that those would now have to be revised.

'My focus remains on a balanced approach: investing in frontline services like health, education and law and order and keeping debt at prudent levels.

“Increasing borrowing, spending and debt, as some political parties have proposed, would damage New Zealand’s reputation for responsible fiscal management and lead to increased borrowing costs for all Kiwis.'

Fellow ratings agencies Moody’s and Standard & Poor’s have not recently adjusted their ratings.