In conjunction with the Budget 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$34 billion, NZ$4 billion higher than that published at the Half Year Economic and Fiscal Update 2022. The forecast NZGB programmes for 2024/25, 2025/26, and 2026/27 have all been increased, by NZ$2 billion, NZ$10 billion and NZ$4 billion respectively.
The forecast for the 2022/23 year is unchanged, with a NZ$28 billion NZGB programme.
Short-term borrowings (Treasury Bills (T-Bills) and Euro-Commercial Paper (ECP)) at the end of 2022/23 are forecast to be NZ$4.5 billion. At the end of each of the remaining fiscal years short-term borrowings are forecast to be NZ$9 billion.
Forecasts – New Zealand Government Bonds and short-term borrowings
|Year ending 30 June
|Gross NZGB issuance
NZGB maturities and repurchases1
|Net NZGB issuance
(% of GDP)
|Forecast short-term borrowings
- Includes repurchases of bonds from the Reserve Bank of New Zealand held under the Large Scale Asset Purchase programme.
- Subject to market conditions, it is expected that a tap of the existing 14 April 2033 nominal NZGB will be issued via syndication prior to 31 December 2023. 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.
- For nominal NZGB tenders effective 1 July 2023, a more flexible approach to tender issuance will be taken. In addition, from 1 July 2023, all NZGB, IIB and T-Bill tenders will open at 2pm and close at 2:30pm, with results announced from 2:35pm. For more information see ‘Advisory Note: Changes to Nominal New Zealand Government Bond Tender Issuance Approach’.
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