David Farrar: Fitch says we need fiscal consolidation

Fitch Ratings released:

Fitch Ratings has revised the Outlook on New Zealand’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable and affirmed the IDR at ‘AA+’.

The Outlook revision reflects our view that a substantial debt reduction is becoming more difficult to envisage, as fiscal consolidation has been delayed in the past few years. The general government debt-GDP ratio has increased substantially over the past six years as the economy has been buffeted by a number of shocks.