...Strong Structural Features, Debt Decline Uncertain: New Zealand's `AA+' rating balances its wealthy economy and high governance standards against its vulnerability to external shocks, an elevated current account deficit and high household debt. The Negative Outlook reflects Fitch Ratings' view that a sustained reduction in government debt/GDP is subject to a substantial degree of uncertainty due to elections in November 2026, the impact of the global energy shock, and a record of fiscal tightening which is still nascent. Improving Fiscal Finances: The September pre-election 2026 Budget Update points to a lower operating balance before gains and losses excluding Accident Compensation Corporation (OBEGALx) of 1.9% of GDP for the fiscal year to June 2026 (FY26), relative to 2.6% of GDP projected in May 2026. The government expects the OBEGALx to return to surplus in 2028- 2029. The five-year government yield average was 4.4% in September 2026, above the 3.5% average of September 2025. Elections...
