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.