Standard and Poor’s decision to reaffirm New Zealand’s AA credit rating underlines the importance of responsible and consistent economic management to give businesses the confidence to invest and grow, Finance Minister Bill English says.

“This Government’s responsible economic and fiscal management means New Zealand is now more resilient to international economic volatility,” Mr English says.

Standard and Poor’s highlights New Zealand’s fiscal settings, economic resilience and Reserve Bank credibility as factors in its decision to reaffirm the strong AA rating with a stable outlook.

“That shows why we need to continue with consistent and responsible economic policy.

“Despite ongoing volatility internationally, Standard and Poor’s expects the New Zealand economy to grow by an average of 2.7 per cent over the next four years.”

One risk highlighted by Standard and Poor’s is New Zealand’s level of foreign debt. Net external debt has fallen to 55 per cent of GDP – down from 83 per cent when National took office, and is the lowest level since 2003.

“The best thing the Government can do to reduce national debt is to get its own finances in order. That’s why we’ve been so focused on turning the books around from an $18.4 billion deficit in 2011 to a small surplus.”

Treasury forecasts New Zealand’s core Crown net debt to be 27 per cent of GDP in 2015/16 before falling to around 20 per cent of GDP in 2020. This compares to current net debt levels of around 18 per cent in Australia, 38 per cent in Canada and 80 per cent in the UK and United States.

New Zealand also has the top Aaa credit rating from Moody’s, and is rated AA by Fitch.