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Speaker 1: Now New Zealand's credit rating out look took a hit

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Speaker 1: over the weekend. Fitch revised our long term outlook from

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Speaker 1: stable to negative. We get to keep the double A

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Speaker 1: plus rating for now. The problem though, is our national

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Speaker 1: data is high and it's not coming down. Sagaurika Chandra

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Speaker 1: is Fitch's primary rating analyst and with us now, hi,

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Speaker 1: Sagarika hi, what was having the initial Yeah, look, thank

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Speaker 1: you for joining us. What would you like to see

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Speaker 1: for us to avoid what comes next, which is a

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Speaker 1: writing downgrade?

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Speaker 2: Yes. So the outlook revision has been primarily been based

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Speaker 2: on a somewhat steady delay in the physical consolidation part

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Speaker 2: of the government. So now we're seeing that in our

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Speaker 2: baseline a substantial debt production is becoming harder to envis

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Speaker 2: out over over our forecast period. And that is that

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Speaker 2: has been backed by what we are seeing as a

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Speaker 2: uh somewhat delayed economic recovery, and some of the expenditure

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Speaker 2: commitments of the government are being are harder to to

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Speaker 2: roll back and the spending is more persistent. So for

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Speaker 2: us too to revise the outlook back two stables, I

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Speaker 2: think what we would be looking for is a greater

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Speaker 2: confidence in in our own assessment of the authorities ability

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Speaker 2: to to consolidate and stay on that path. So there

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Speaker 2: has been a delay in the return to two surplus

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Speaker 2: uh persistently that we have been seeing in in successive budgets.

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Speaker 2: And even though some of the physical outlook out turns

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Speaker 2: have been somewhat better than what authorities were projecting, the

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Speaker 2: return to to surplus has been extended by say one year,

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Speaker 2: every year by a year. So I think what we

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Speaker 2: would be we would be looking for is just increase

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Speaker 2: confidence that they will be able to reduce their debt

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Speaker 2: numbers substantially and stay committed on the path of fiscal consolidation.

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Speaker 2: So a somewhat increasing track record of fiscal discipline and

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Speaker 2: sticking to the targets that have been outlined in their budgets.

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Speaker 1: Okay, so how long do you leave it before you know?

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Speaker 1: In order for this is a warning shot? Right, So

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Speaker 1: how long do you leave it after the warning shot

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Speaker 1: before you actually downgrade the rating if you don't see

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Speaker 1: things turn around?

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Speaker 2: Yeah, So our ratings and outlook, the assignment of the

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Speaker 2: rating and the outlook is is typically for a period

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Speaker 2: of eighteen to twenty four months. However, we do continue

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Speaker 2: to monitor development.

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Speaker 1: Oh, I think I think we've I think the Chinese

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Speaker 1: spies have cut us off. That is that, that is

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Speaker 1: the end of that phone called to Hong Kong. Sugareka,

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Speaker 1: Thank you very much, Sagurrika Chandra, who is Fitch's primary

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Speaker 1: rating analyst. For more from Hither Duplessy Alan Drive, listen

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Speaker 1: live to news talks. It'd be from four pm weekdays,

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