New Zealand hands out extra cash to fight 'inflation storm'

WELLINGTON, New Zealand (AP) — New Zealand’s government said Thursday it will hand out an extra few hundred dollars to more than 2 million lower-income adults to help them navigate what it describes as “the peak of the global inflation storm.”

The payments are part of a package of new measures announced in the government’s annual budget. Other plans include increasing health spending by a record amount, putting more money into reducing greenhouse gas emissions and boosting defense spending.

A report by Treasury painted a rosy picture of the nation’s economy through next year but warned growth would slow markedly from 2024 due to rising interest rates, a reduction in the government’s pandemic spending, and supply issues made worse by Russia’s invasion of Ukraine.

A Treasury report forecast unemployment would hit a low of 3.1% this year before rising to 4.7% by 2026. It predicted inflation would fall from its current 30-year high of 6.9% to 2.2% over the next four years.

The inflation payments of 350 New Zealand dollars ($220) over three months begin in August and are targeted at the half of all adults who earn less than 70,000 New Zealand dollars ($44,000) per year. The government also decided to extend some other temporary measures aimed at combatting spiraling living costs, including a cut to gas taxes and half-price public transportation fares.

“Our economy has come through the COVID-19 shock better than almost anywhere else in the world,” said Prime Minister Jacinda Ardern in a statement. “But as the pandemic subsides, other challenges both long-term and more immediate have come to the fore.”

Ardern has been isolating at her Wellington residence this week after catching the virus. Her office said she’d experienced moderate symptoms and was improving, and at this...