Global credit rating agency Moody's has adjusted its outlook for New Zealand's economy to 'negative' from 'stable', citing persistent fiscal challenges and high debt levels. The downgrade reflects concerns about the government's ability to manage spending amid economic headwinds.
Finance Minister Nicola Willis responded by emphasizing the need for 'disciplined spending' to restore confidence. 'This is a reminder that we must be careful with taxpayer money and focus on reducing debt,' Willis said in a statement.
The Moody's decision follows similar moves by other rating agencies, as New Zealand grapples with slowing growth and rising costs. The government has pledged to return to surplus by 2027, but the negative outlook suggests risks remain.
Economists note that while the outlook change does not immediately affect New Zealand's credit rating, it could increase borrowing costs if not addressed. The Treasury is expected to release updated fiscal projections in the coming weeks.
