March 05, 2026

#economy: Government Accounts Show Smaller-Than-Expected Deficit

Matthew Tukaki Posted On March 5, 2026

The Government’s latest financial statements show the Crown’s books are performing slightly better than forecast, although the country remains in deficit partway through the current financial year.

Treasury has released the Interim Financial Statements of the Government of New Zealand for the seven months ended 31 January 2026, reporting that the key fiscal indicators were generally favourable compared with earlier projections made in the Half Year Economic and Fiscal Update.

The Government’s main operating indicator – the operating balance before gains and losses excluding ACC – recorded a deficit of $6.0 billion, which is $1.9 billion smaller than forecast for the same period.

Net core Crown debt was also slightly lower than expected, sitting at $184.3 billion, equivalent to 41.9 percent of gross domestic product, and about $1.1 billion below forecast.

Treasury figures show core Crown tax revenue reached $70.4 billion, broadly matching expectations and only slightly below forecast.

Total core Crown revenue came in at $77.3 billion, around $400 million lower than predicted, largely due to reduced revenue from the Emissions Trading Scheme as the price of New Zealand carbon units fell after the forecasts were prepared.

Government financial statements are prepared regularly throughout the year to track how actual spending and revenue compare with economic forecasts. They consolidate the finances of the Crown, including government departments, Crown entities, state-owned enterprises and other public bodies.

While the latest figures show some improvement compared with earlier projections, the Government is still operating in deficit as it works toward longer-term fiscal targets.

Treasury officials say the interim results reflect a mix of stable tax income and lower-than-forecast debt levels, although wider economic conditions and government spending decisions will continue to influence the country’s fiscal outlook in the months ahead.