New Zealand's net debt tipped to increase to 50 percent of GDP - Kiwibank chief economist

Figures to be released on Thursday will show the huge toll COVID-19 has had on our economy.

New Zealand is likely to officially be in recession after the release of the gross domestic product (GDP) for the June 2020 quarter.

In May, finance minister Grant Robertson unveiled his $50 billion dollar rescue and recovery budget. 

"This is the most significant financial commitment by a New Zealand Government in modern history," he said.

A commitment that's expected to balloon our debt to $219 billion by 2024.

"What that means is we'll see net debt-to-GDP increase from around 20 percent to around 50 percent," Kiwibank chief economist Jarrod Kerr told The Project on Wednesday.

"Now that sounds like quite a dramatic increase, but most advanced countries would love to start at 50 percent, let alone finish 50 percent."

The net debt GDP in the US has already tipped over 100 percent, while Japan had more than 200 percent in debt prior to the crisis, Infometrics senior economist Brad Olsen told The Project.

"We want to make that debt pile smaller over time so that when the next crisis hits - be that a natural disaster, a tsunami or another pandemic - we have that money ready to go again to support Kiwis," he said.