New Zealand’s economic recovery from Covid is ‘a lot better than expected,’ says deputy prime minister

New Zealand’s economic recovery from the Covid-19 pandemic has been “a lot better than expected,” its Deputy Prime Minister Grant Robertson told CNBC Thursday.

That has allowed New Zealand to spend “large sums of money” on helping its low-income population while still keeping its net debt in check, Robertson told CNBC’s Will Koulouris.

Robertson delivered New Zealand’s latest government budget earlier on Thursday.

One highlight of the budget was boosting weekly welfare payments by up to 55 New Zealand dollars (around $39.50) per adult to tackle inequality and child poverty. Robertson said in his budget speech that the planned increase will be the largest in “more than a generation.”

The budget also allocated spending for Covid-19 vaccines, infrastructure, education and welfare of the indigenous Maori.

The planned spending is estimated to raise the budget deficit to 18.4 billion New Zealand dollars ($13.2 billion) in the fiscal year ending June 2022 before declining in subsequent years, according to New Zealand’s Treasury.

Deficit for the current fiscal year ending June 2021 is expected to be 15.1 billion New Zealand dollars.

Net debt is also estimated to grow from 34% in the current fiscal year ending June 2021 to 43.8% in the following fiscal year.

Compared to many countries, New Zealand has been relatively successful in containing the spread of the coronavirus locally. That has allowed most of the economy to operate normally.

New Zealand’s Treasury has forecast a strong economic rebound in the years ahead.

The economy is expected to grow 2.9% in the fiscal year ending June 2021, before reaching 3.2% and 4.4% in the following two years, according to the Treasury.

Health ministry data showed that as of Thursday morning, the country’s cumulative confirmed and probable Covid infections stood at 2,659, with 26 deaths.

This is a developing story. Please check back for updates.