NZ Treasury: Unemployment rate to peak at 7.8% vs. 9.8% forecast in budget

Dhwani Mehta FXStreet

New Zealand’s (NZ) Treasury is out with its pre-election Economic and Fiscal Update (PREFU) for this year, with the key takeaways found below (via Reuters).

NZ govt sees unemployment rate to peak at 7.8%, down from 9.8% forecast in budget.

Sees June quarter GDP at -16%, down from its previous forecast of -23.5%.

Sees 2020 GDP -3.1% (Budget -4.6%); 2021 GDP at -0.5%.

Sees 2020 net debt 27.6% of GDP (budget 30.2%).

Sees net debt rising to 55.3% of GDP in 2024.

2020 cash balance NZD23.692 bln (budget NZD-32.031 bln)

Forecasts shallower virus slump, longer impact.

Market reaction

Despite slightly better economic forecasts, NZD/USD remains on the offers while defending the 0.6700 level amid pre-Fed caution trading.

The spot trades at 0.6715, down 0.07% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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