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

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.