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. 

The agency said New Zealand's ratings are underpinned by very high governance standards and a demonstrated commitment to prudent fiscal management, balanced against high levels of household and net external debt. 

“A credible policy framework enhances the economy's resilience to shocks, as evident during the coronavirus pandemic, where a robust public health and macro-policy response has enabled the country to weather the shock exceptionally well by global standards. 

“New Zealand entered the health crisis with sizeable fiscal buffers, and public debt levels have been contained at moderate levels relative to peers despite a sizeable policy response.”

Finance Minister Grant Robertson said this is acknoledgement of the Government’s decision to clamp down hard on COVID-19 and enter the first lockdown in early 2020. 

“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,” Grant Robertson said. (continue reading below)

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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,” Grant Robertson said.

“We supported 1.8 million workers through the Wage Subsidy Scheme and invested billions in infrastructure, training and creating jobs.

“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,” Grant Robertson said.

You can view the Fitch report by clicking here.