The New Zealand government's operating deficit in the 10 months ending April dipped slightly below the forecast in the annual Budget last month, according to a New Zealand Treasury report Friday.
The operating balance before gains and losses was in deficit by 1.4 billion NZ dollars (1.19 billion U.S. dollars), which was 148 million NZ dollars (125.71 million U.S. dollars) less than expected, said the Treasury's Financial Statements.
Revenue of 55.5 billion NZ dollars (47.14 billion U.S. dollars) was 12 million NZ dollars (10.19 million U.S. dollars) lower than forecast, and expenses of 57.9 billion NZ dollars (49.2 billion U. S. dollars) were 90 million NZ dollars (76.44 million U.S. dollars) less than expected.
Finance Minister Bill English said the figures showed the government is on track to a "modest surplus" of 372 million NZ dollars (316.05 million U.S. dollars) next year, rising to 3.49 billion NZ dollars (2.96 billion U.S. dollars) in the 2017-2018 fiscal year.
The surplus was essential for sustaining economic growth over the medium term and for holding down interest rates, English said in a statement.
"Returning to surplus will allow us to repay debt, and give us better choices in how we support New Zealand families and households," he said.
However, commentators are expecting the Reserve Bank of New Zealand (RBNZ) to lift the official cash rate by 25 basis points to 3.25 percent next week, and possibly again in July as it seeks to rein in inflationary pressures.
The RBNZ has made two rises of 25 basis points each since March, saying pressures on the housing market and immigration were contributing to inflation influences in the improving economy.