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New Zealand government fails to deliver promised budget surplus but says it will next year

WELLINGTON, New Zealand – New Zealand’s government is blaming low inflation for its failure to deliver a promised budget surplus this year but says it remains on target to get its books into the black next year.

New Zealand had hoped to become one of the first developed nations to return to a surplus following the 2008 global financial crisis. That would allow it to begin repaying debt.

But when Finance Minister Bill English delivered his annual budget Thursday, the planned surplus had evaporated into a projected a deficit of 684 million New Zealand dollars ($501 million) for the year ending June. His forecasts indicate a tiny surplus next year, increasing to a NZ$3.6 billion surplus by 2019.

New Zealand’s agriculturally based economy has grown at a relatively healthy annual clip of 3.3 per cent.