The Government’s handling of the COVID-19 pandemic and faster than expected economic recovery has been acknowledged in today’s credit rating upgrade.
Credit ratings agency Standard & Poor’s (S&P) today raised New Zealand’s local currency credit rating to AAA with a stable outlook. This follows Fitch reaffirming its AA+ rating last month.
S&P praised the Government’s handling of the pandemic saying New Zealand is recovering quicker than most advanced economies because it has been able to contain the spread of COVID-19 better than most others.
“We have always said the best economic response to this pandemic is a health response, which is why we went hard and early with our decisions just over a year ago,” Minister Grant Robertson said.
“The economy has bounced back because we did not waste any time as we saw the pandemic take hold overseas. We supported around 1.8 million workers through the Wage Subsidy Scheme and invested billions in infrastructure, training and creating jobs.”
S&P says those measures softened the blow presented by COVID-19 and are supporting the subsequent economic recovery.
The agency also says the New Zealand Government’s relatively better management of the pandemic means that its credit metrics are in a good position to weather negative shocks to the economy.
“Our careful management of the Government’s books meant we were in good shape as we went into 2020, particularly with relatively low public debt. That stood us in good stead as we supported our people and our businesses through the pandemic.
“That support continues as we open applications for the new Resurgence Support Payment tomorrow to help businesses affected by last week’s increased alert levels.
“There are still challenges ahead for the New Zealand economy however we are well positioned to handle them,” Mr Robertson said.