WELLINGTON, New Zealand--The latest government accounts increase the odds New Zealand might hit its an oft-promised budget surplus in the fiscal year to June 30, 2015.
The New Zealand Treasury said Wednesday it had recorded a core surplus, the operating profit before gains and losses, or Obegal, of 1.2 million New Zealand dollars (US$800 million) in the 11 months to May 31 versus a forecast surplus of NZ$193 million.
The gains and losses include those made on government investment funds. Due to short-term market fluctuations, the government tends to strip these out when referring to its accounts.
According to Treasury, the nearly NZ$1 billion difference was due to higher-than-forecast tax revenue and lower-than-anticipated expenses.
In the May budget, Mr. English said the government was unlikely to hit a budget surplus in the current financial year that ended June 30 as Treasury forecast a deficit of NZ$684 million.
The admission was a bitter pill for Mr. English to swallow, in particular after the government, re-elected for a third term last September, campaigned heavily on bringing the country back into surplus this financial year.
On Wednesday, however, Mr. English said: "There is always volatility in the monthly Crown accounts and we won't know for some time if there will be a full-year surplus in 2014/15. What is important is that these results indicate the Government is on track to anchor Crown debt levels at a low, sustainable level."
New Zealand has been in deficit since the year to June 2009, largely as a consequence of the financial crisis that drove much of the world into recession. The accounts were made worse by a series of earthquakes in Christchurch that resulted in more than NZ$40 billion of damage.
Write to Rebecca Howard at rebecca.howard@wsj.com
(END) Dow Jones Newswires
July 07, 2015 18:29 ET (22:29 GMT)
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