18 Jun 2013

Surplus expected to take year longer than forecast

3:42 pm on 18 June 2013

Economists do not expect the Government's books to return to surplus by June 2015 as planned.

Consensus forecasts by the Institute of Economic Research found economists expect a return to surplus in 2016, a year later than the Treasury forecast in this year's Budget.

They are picking the economy to expand on average by 2.7% per year for the next three years, underpinned by the Canterbury rebuild and gradual underlying recovery, though the drought will flatten export expansion in the year to March 2014.

The dollar is expected to remain high despite weakening recently, while wages and jobs should continue improving.

Inflation will remain subdued, with interest rates set to start rising from early next year.

The survey covers 10 investment and trading banks, the Reserve Bank, the Treasury, and the Institute of Economic Research.