RTTNews reports that the New Zealand government upgraded its economic and fiscal outlook as the economy rebounded from the Covid-19 restrictions.

According to the latest update, the economy will grow 1.5 percent over the year to June 2021 instead of a 0.5 percent contraction estimated in the Pre-Election Economic and Fiscal Update, or PREFU, released in September.

The treasury said the fiscal outlook has improved mainly due to stronger economic activity than previously forecast.

The budget deficits have reduced in all years across the forecast period when compared to the PREFU. The budget deficit is seen at NZ$21.6 billion in the fiscal year 2021, NZ$16.4 billion in the fiscal year 2022 and NZ$10.3 billion in the fiscal 2023. The pace of the reduction in the budget deficits is expected to be faster than previously expected.

The unemployment rate is forecast to peak at 6.9 percent by the end of 2021, compared to 7.8 percent forecast in the pre-election update.