In conjunction with the Pre-election Economic and Fiscal Update 2023, the Treasury has updated the forecast core Crown borrowing programme.
The forecast 2023/24 New Zealand Government Bond (NZGB) programme has been increased to NZ$36 billion, NZ$2 billion higher than published at the Budget Economic and Fiscal Update 2023. The forecast NZGB programmes for 2024/25 and 2026/27 have also been increased, by NZ$3 billion and NZ$4 billion respectively. The forecast for the 2025/26 year is unchanged.
Forecast short-term borrowings (Treasury Bills (T-Bills) and Euro-Commercial Paper (ECP)) at the end of each fiscal year are unchanged at NZ$9 billion.
Forecasts – New Zealand Government Bonds and short-term borrowings
| Year ending 30 June (face value) | 2024 | 2025 | 2026 | 2027 | Total |
|---|---|---|---|---|---|
| Gross NZGB issuance (NZ$ billion) | 36.0 | 35.0 | 30.0 | 28.0 | 129.0 |
|
NZGB maturities and repurchases1 (NZ$ billion) |
18.8 | 19.9 | 18.2 | 22.9 | 79.7 |
| Net NZGB issuance (NZ$ billion) | 17.2 | 15.2 | 11.8 | 5.1 | 49.3 |
|
NZGBs outstanding (NZ$ billion) |
169.6 | 184.8 | 196.6 | 201.7 | n/a |
| NZGBs outstanding (% of GDP) | 41% | 42% | 42% | 41% | n/a |
| Forecast short-term borrowings (NZ$ billion) | 9.0 | 9.0 | 9.0 | 9.0 | n/a |
- Includes repurchases of bonds from the Reserve Bank of New Zealand held under the Large Scale Asset Purchase programme.
Further Details
- Subject to market conditions, it is expected that two new nominal NZGB lines will be launched, via syndication, before the end of the fiscal year. The maturities of the bond lines will be 15 May 2035 and 15 May 2054. Further details will be announced in subsequent updates.
- Gross issuance into inflation-indexed bonds (IIB) is expected to be less than NZ$1 billion in 2023/24. Actual gross issuance of IIBs will be subject to market conditions and indicated demand from market participants.
- There are plans to commence a repurchase programme of the 15 May 2024 nominal bond prior to maturity. Repurchase activities will be dependent on portfolio requirements and market conditions.
- The composition of short-term borrowings will include a minimum of US$1 billion of ECP and NZ$2 billion of T-Bills. The balance of short-term borrowings will be a mix of ECP and T-Bills, depending on relative cost and market dynamics.
- A flexible approach to short-term borrowing will continue to be taken in the annual borrowing programme. Actual issuance of short-term borrowings may vary from forecast, based on realised short-term cash needs. Intra-year, short-term borrowings on issue are expected to vary from NZ$6 billion to NZ$15 billion during normal market conditions.
ENDS
Treasury Contacts
Kim Martin | Director, New Zealand Debt Management
Tel: +64 4 890 7274
Paxton McKenzie | Head of Funding, Investment, and Markets
Tel: +64 4 917 6925