Unexpected surplus on New Zealand government accounts

The New Zealand government was Wednesday celebrating a surprise operating surplus in the 11 months to the end of May.

But critics warned the surplus just one month short of the full fiscal year could be short-lived as the economy looks set to slow.

The government's Financial Statements, released by the Treasury, showed an operating surplus of 1.17 billion NZ dollars (779.57 million U.S. dollars) in the fiscal year to date, up from a projected surplus of just 193 million NZ dollars (128.55 million U. S. dollars) from a forecast in May.

The surplus reflected a higher than forecast revenue, at 87 billion NZ dollars (57.95 billion U.S. dollars) and lower than anticipated spending.

Finance Minister Bill English said the result reflected the government's prudent financial management, but the audited statements for the full financial year, which ended last month, could show a different picture when they were released in October.

"There is always volatility in the monthly Crown accounts and we won't know for some time if there will be a full-year surplus in 2014-2015," English said in a statement.

"What is important is that these results indicate the government is on track to anchor Crown debt levels at a low, sustainable level."

The opposition Green Party said the surplus was a blip on the government's operating balance as Treasury downside forecasts for the economy were looking increasingly likely.

Citing declining business confidence, collapsing dairy prices and stagnant wages, Green Party co-leader Metiria Turei said in a statement that the government may soon need to start spending again to avoid a recession.