Treasury is forecasting government financial support will have less and less impact on economic demand over coming years, meaning fiscal policy should support Reserve Bank monetary policy efforts to rein in inflation. In the Government's Half-Year Economic and Fiscal Update (HYEFU) out Wednesday, The Treasury says the strategy of returning the Operating Balance Before Gains and Losses (OBEGAL) to surplus, from deficit, by 2024/25 and to retain current settings for allowances for new operating spending, should see a net reduction in public demand, helping cool inflation and reducing the need for the Reserve Bank to continue raising interest rates.

https://www.interest.co.nz/public-policy/118893/government-financial-support-economic-demand-tailing-leading-reducing-demand

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