S&P raised New Zealand’s foreign and local currency government debt rating by a notch to AA+ and AAA, up from AA and AA+ respectively. The ratings are back to a level last seen in 2009. A “stable” outlook was attached to the new ratings.
“New Zealand is recovering quicker than most advanced economies after the Covid-19 pandemic and subsequent government lockdown delivered a severe economic and fiscal shock to the country,” S&P said. “While downside risks persist, such as another outbreak, we expect New Zealand’s fiscal indicators to recover during the next few years.”
“This provides us with better clarity over the extent of the pandemic’s damage to the government’s balance sheet,” it said in a statement,” it said, “We now believe that the government’s credit metrics can withstand potential damage from negative shocks to the economy, including a possible weakening of the real estate market”.
