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New Zealand Debt Management
Investor Update
July 2022

The Investor Update is a monthly publication that provides a quick snapshot of the New Zealand economy, the fiscal outlook, monetary policy and the New Zealand Government Debt Market. 

Economic Update

Real GDP fell 0.2% in the March 2022 quarter, as poor weather and production disruptions from the pandemic weighed on exports. These negative impacts are expected to wane in coming quarters and the reopening of borders should support a recovery in tourism. More timely partial indicators of activity point to a rebound in GDP in the June quarter, but headwinds are rising, with consumer confidence at record lows and house prices continuing to fall.
The GDP release provided further confirmation of strong price growth, with nominal GDP rising 1.9% in the quarter. While this was below the Budget Economic and Fiscal Update (BEFU) 2022 forecasts, historical revisions resulted in nominal GDP in the year to March 2022 being in line with forecast.
For further up to date economic indicators read the Treasury’s latest Fortnightly Economic Update.

Fiscal Update

The Government’s financial accounts for the eleven months ended 31 May 2022 showed a NZ$7.6 billion operating balance before gains and losses (OBEGAL) deficit, NZ$5.5 billion better than forecast in BEFU 2022, reflecting higher core Crown tax revenue and lower core Crown expenses. Meanwhile, core Crown residual cash was close to BEFU forecasts.

New Zealand Government Bond Market Developments

As per the Reserve Bank of New Zealand’s (RBNZ) announcement regarding the operational details of the sales of New Zealand Government Bonds (NZGBs) purchased under its Large Scale Asset Purchase (LSAP) programme, to New Zealand Debt Management (NZDM), the first sale will take place on 15 July 2022. NZDM will publish repurchase results on the data page of the NZDM website.

As previously announced, NZDM have incorporated these NZGB repurchases into the forecast core Crown borrowing programme and NZGBs repurchased from the RBNZ will be retired. NZDM will issue the entire borrowing programme according to the NZDM funding strategy, independent of the bond maturities repurchased from the RBNZ.

Figure 1: NZGBs held under LSAP
Source: Treasury, RBNZ

The recently published July tender schedule stated that Inflation-Indexed Bond (IIB) tenders are scheduled for 14 July 2022 and 28 July 2022.  As previously announced, IIB demand from market participants will be assessed on the Monday prior to a scheduled IIB tender. The information received will contribute to the decision to hold that tender, as well as the volume and the IIB maturity date(s) to be offered. If your organisation would like to provide feedback, please email or NZDM would be happy to facilitate a call if preferred.

Upcoming Events

Green Bond Syndication - Prior to 31 December 2022
Tap syndication of the 2035 IIB alongside a buyback 2025 IIB - Prior to 31 December 2022
Contact us
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