-
Related
The government's books have plunged $5.7 billion into the red - $7.1 billion worse than forecast - on the back of the global recession.
The government's financial statements, released on Thursday, show the crown operating balance was $5.7 billion in deficit at November 30, 2008, against a forecast surplus of $1.4 billion.
Treasury deputy secretary Peter Bushnell said the main reason for the worse than expected result in the monthly update was unrealised losses on government investments as a result of severe turbulence on global sharemarkets.
The losses for the New Zealand Superannuation Fund, ACC and the Earthquake Commission were collectively $5.1 billion more than expected.
Tax revenues, especially for GST, were also slightly lower than expected.
The figures follow Treasury's forecast in December which set out a grim scenario for New Zealand over the next few years.
Treasury's projections showed a doubling of gross debt from the current level of 16.8% of GDP to 33% by 2012/13.
The economy is forecast to come to a virtual standstill, bringing in less tax and more benefit expenses, and accompanied by cash deficits rising to $10 billion by 2011.
