Hon Bill English
Minister of Finance

29 January 2014

Moody’s Aaa rating confirms NZ on right track

Moody’s Investors Service says New Zealand’s economy and government finances are on an improving trend, which confirms the Government’s responsible economic and fiscal programme is on the right track, Finance Minister Bill English says.

New Zealand is one of only 10 countries with the top Aaa rating and a stable outlook by Moody’s. It is also rated AA by Standard and Poor’s.

“The Government’s economic programme is supporting this growth and the improvement in the fiscal position and it’s encouraging that this has again been recognised by Moody’s,” Mr English says.

“As Moody’s notes in its credit analysis today, economic growth is accelerating, the Government’s books are expected to be in surplus next year and the ratio of government debt to GDP will peak below the median for Aaa-rated countries.

“Overall, Moody’s rates New Zealand’s economic strength as high, despite it being the second smallest country rated Aaa – behind Luxembourg.

“Despite this, and its dependence on agricultural exports, Moody’s also notes that New Zealand has displayed resilience over the past few years in recovering from its domestic recession of 2008, the global financial crisis and the Canterbury earthquakes.

“And, as Moody’s says, New Zealand remains highly competitive, being ranked 18 out of 148 countries in the most recent World Economic Forum’s global competitiveness index and third in the World Bank’s ease of doing business report.”

Moody’s reiterates that New Zealand faces challenges, including its continued reliance on foreign savings and overseas borrowing.

“The longstanding current account deficit has improved in recent years, as has New Zealand’s net international liabilities position,” Mr English says.
“But we need to continue with policies to further improve these indicators by building a more competitive export sector so New Zealand can earn its way in the world.”

Moody’s media release: https://www.moodys.com/research/Moodys-New-Zealands-economy-and-finances-improving--PR_291309

ENDS

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