WELLINGTON, May 20 (Xinhua) -- The government's response to COVID-19 and strong economic management has placed New Zealand on a firmer footing to accelerate the recovery and address social and infrastructure deficits, Finance Minister Grant Robertson said on Thursday while delivering the 2021 budget.
"The economy has performed better than expected, thanks to the efforts of businesses, workers and the government's decisive and bold action through highly uncertain times," Robertson said.
The economy is expected to strengthen from the second half of this year, with growth peaking at 4.4 percent in June 2023. Unemployment is forecast to decline to 4.2 percent at the end of the forecast period, he said.
"This is still a COVID budget, with economic support and stimulus," Robertson said, citing ongoing uncertainties and stressing that the budget takes a balanced approach to investing in areas and people where it is needed most, alongside careful fiscal management to pay down debt.
The improved labor market outlook and strength in economic activity suggest that the long-term effects of the pandemic "will not be as severe as previously thought," he said.
The strong recovery is reflected in the government's financial accounts, which continue to track better than expected. The deficit over the forecast period peaks at 5.3 percent of GDP in June 2022 before declining to 0.6 percent of GDP by June 2025, according to the budget.
Net core crown debt will peak at 48 percent of GDP in 2023, before reducing to 43.6 percent of GDP at the end of the forecast period, it said.
The government will continue to advance the three priorities of keeping New Zealanders safe, accelerating the recovery and dealing with long-standing issues of climate change, child wellbeing and affordable housing, the budget shows.
Efforts are made to reduce social inequalities and "make a material difference to the daily lives of the more vulnerable," the minister said, adding the recently announced housing package will assist first home buyers and boost the supply of new homes.
Th new budget increases the benefit levels by between 32 NZ dollars (23 U.S. dollars) and 55 NZ dollars per adult, with welfare beneficiaries a clear focus of the budget in 2021. Enditem
