S&P Global Ratings on Wednesday affirmed New Zealand's foreign-currency sovereign credit rating at AA+/A-1+ and its local-currency rating at AAA/A-1+, both with a stable outlook. However, the agency noted that the fiscal deficit needs to be addressed. " We could lower our ratings on New Zealand if the fiscal deficit does not narrow as we forecast, driving government debt and interest costs substantially higher," the agency said in a statement. Conversely, a material strengthening of fiscal metrics might lead to an upgrade. The rating agency projects the country’s GDP will pick up to 2.2%–2.3% over the next three fiscal years, with the direct impact of U.S. tariffs expected to be manageable. Moody’s last assigned New Zealand a credit rating of Aaa with a stable outlook.