The Government’s prudent fiscal management and strong policy programme in the face of the COVID-19 global pandemic have been acknowledged by the credit rating agency, Fitch.
Fitch has today affirmed New Zealand’s local currency rating at AA+ with a stable outlook and foreign currency rating at AA with a positive outlook.
The agency praised the Government’s policy framework, saying the robust public health and macro-policy response to the global COVID-19 pandemic has enabled New Zealand to weather the economic shock exceptionally well by global standards.
“This is further confirmation that our decision to move quickly to protect our people and our economy was the right one, as COVID-19 took hold overseas. We used our strong balance sheet to support our workers and businesses through lockdowns as well as keeping in place a buffer in the case of a resurgence,” Finance Minister, Grant Robertson said.
Fitch also noted the Government’s effective suppression of COVID-19 domestically and its policy response has meant New Zealand is in a V-shaped economic recovery, with GDP returning to pre-pandemic levels by the September quarter last year.
“The economic bounce back was a result of our decision to act swiftly during the COVID-19 pandemic. We supported 1.8 million workers through the Wage Subsidy Scheme and invested billions in infrastructure, training and creating jobs,” Mr Robertson said.
“While there are vaccines being rolled out in countries seriously affected by COVID-19, the world is by no means out of the woods yet. There is still a huge amount of global uncertainty in the face of new strains of the virus and continued struggles in many countries to contain COVID-19 domestically.
“We went into the economic shock caused by the global pandemic with our finances in good shape, including with very low public debt. While we have borrowed more to protect our people and economy, our net debt as a percentage of GDP remains lower than many of our international peers.”