A financial markets economist does not anticipate the Government having any problems borrowing more to cover higher earthquake costs if it needs to.
The Government says it is on track for a record deficit of $18 billion after the Earthquake Commission on Tuesday doubled its liability estimates for the Canterbury earthquakes from $3.05 billion to $7.07 billion.
Finance Minister Bill English says the improving economy was set to cut the deficit from $16.7 billion forecast in the Budget in May to $14 billion.
But a $4 billion blowout in the Earthquake Commission's expected losses from the Canterbury quake claims means the deficit is now expected to top $18 billion.
Some of that increase looks likely to be met by increased borrowing.
An economist at TD Securities in Singapore, Annette Beacher, says the Government's commitment to return the Budget to surplus by 2015 despite the higher quake costs means it should not have problems funding a higher deficit.
