NZDM reveals further decrease to 2020/21 borrowing programme
- Wednesday, 16 December 2020
On 16 December, New Zealand Debt Management (NZDM) revealed a NZ$5 billion decrease (US$3.5 billion) to its 2020/21 financial year borrowing requirement, following the New Zealand Treasury’s half-year economic and fiscal update. The reduction means gross New Zealand government bond (NZGB) issuance in 2020/21 is expected to be NZ$45 billion.
The decrease follows a NZ$10 billion reduction to the expected borrowing requirement announced at the New Zealand government’s pre-election economic and fiscal update in September. NZDM’s initial 2020/21 borrowing requirement announced at the government budget in May, was NZ$60 billion.
NZDM’s forecast borrowing requirement in each of the 2022, 2023 and 2024 financial years has also been reduced by NZ$5 billion, to a gross of NZ$30 billion per year. A NZ$25 billion requirement for the 2025 financial year has been added to the outlook (see table).
New Zealand government bonds and Treasury bills forecast
| 2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 | |
|---|---|---|---|---|---|
| Gross NZGB issuance (NZ$bn) | 45 | 30 | 30 | 30 | 25 |
| NZGB maturities and repurchases (NZ$bn) | 11.1 | 0 | 15.9 | 13.5 | 13.7 |
| Net NZGB issuance (NZ$bn) | 33.9 | 30 | 14.1 | 16.5 | 11.3 |
| NZGBs outstanding (NZ$bn) | 128.1 | 158.1 | 172.2 | 188.7 | 200 |
| NZGBs outstanding (per cent of GDP) | 41 | 48 | 49 | 51 | 50 |
| Forecast T-bills on issue (NZ$bn) | 8 | 6 | 6 | 6 | 6 |
Source: New Zealand Debt Management 16 December 2020
NZDM expects to issue two new nominal NZGB lines by syndication before 30 June 2021, including a May 2026 maturity bond to be launched in February. The other is expected to be longer dated. The borrower expects to issue around NZ$1 billion in inflation-indexed bonds during the financial year.
