WELLINGTON (Reuters) - The New Zealand government produced a better-than-expected surplus in the 2017/18 year, the Treasury said on Tuesday, helped by above-trend economic growth and rolling over some spending into next year's budget.
The government's operating balance excluding gains and losses (OBEGAL) in the 12 months to June was NZ$5.534 billion ($3.57 billion), compared with the Treasury's May forecast of NZ$3.141 billion and the previous year's NZ$4.069 billion.
"It’s important we run surpluses and pay down debt to make sure we are in a good position to deal with any rainy day," Finance Minister Grant Robertson said in a statement.
"Economists have been warning about growing risks in the international economy, particularly due to rising trade protectionism, which we need to be well-placed to face in case this flows through to the New Zealand economy."
New Zealand's net debt was 19.9 percent of gross domestic product, beating a forecast of 20.8 percent of GDP.
The New Zealand dollar <NZD=> was little changed after the figures were published, last trading at $0.6452.
Robertson said a number of factors had led to below-forecast expenses, but warned these "one-offs" were largely "timing issues" with some projects. The spending would be reflected in the 2018/19 accounts.
A stonger-than-expected economy boosted revenues, with the
economy growing at an annual rate of 2.8 percent in April-June, its fastest in two years, and a surprise result in the gloomy business climate.
Growth, led by the agricultural sector, was boosted by the lowest interest rates on record.
But business confidence, withering at nine-year lows over its concerns about the Labour government's employment laws and minimum wage hikes, is seen as a key risk for the growth outlook together with signs of a slowdown in China, a key trading partner.
Robertson said his government would "continue to work closely" with business to ensure it understood Labour's agenda, including a fiscal approach that would protect New Zealand's strong economic fundamentals.
"But we also recognise that we need to be investing more and we need to be making sure that everybody in New Zealand gets a fair share in the economy."
(Reporting by Marius Zaharia; editing by Eric Meijer)
