WELLINGTON, May 19 Reuters New Zealand39;s government on Thursday promised to spend more than NZ1 billion 630 million to help people cope with inflation that has reached threedecade highs in the Pacific nation.

The public deficit for the current financial year, ending on June 30, will be narrower than previously forecast but a return to surplus will take longer than expected, the government said in its annual budget announcement.

Heavy spending will be targeted towards defence, infrastructure, including new schools, and the countrys health system, which will see more funding for drugs and, again, infrastructure.

As the pandemic subsides, other challenges both longterm and more immediate, have come to the fore. This Budget responds to those challenges, Prime Minister Jacinda Ardern said in a statement.

COVID19, climate change and the war in Ukraine have taught us we need to build a more secure economy that protects New Zealand households from the external shocks we know are coming, she added. Ardern was not at the release of the budget as she currently has COVID.

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The government predicted a budget deficit of NZ18.978 billion 11.97 billion or 5.2 of gross domestic product for 202122. This was narrower than the NZ20.844 billion forecast in a halfyear fiscal update in December.

However, the government now expects the budget to reach surplus in 202425, a year later that previously forecast.

Net debt under an old method of calculation was forecast to peak at…