Fitch cuts New Zealand's rating outlook to negative amid debt concerns. The agency affirmed the country's AA+ rating but warned that substantial debt reduction is becoming increasingly difficult. Government debt is now projected to reach 56% of GDP by fiscal 2027, significantly higher than Fitch's previous forecast of 36.1% made during a 2022 upgrade. Fiscal consolidation efforts have been delayed, and economic headwinds are mounting. New Zealand's GDP growth slowed to just 0.2% in the fourth quarter, well below economist expectations. Finance Minister Nicola Willis emphasized the government's commitment to fiscal discipline and debt reduction, but the downgraded outlook reflects investor concerns about the nation's ability to stabilize its finances amid economic weakness and geopolitical risks from Middle East tensions affecting energy imports.
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