NEW ZEALAND BUDGET FORECAST SEEN AS POSITIVE Analysts said they were surprised at the government's announcement of a forecast budget surplus for fiscal 1988 but said it was consistent with previous policy statements and positive for the economy. Finance Minister Roger Douglas predicted a budget surplus for the year ending March 1988 of 379 mln New Zealand dlrs against a 1.95 billion deficit last year. Analysts polled by Reuters said the forecast budget surplus was even more positive than the most bullish analysts' forecasts and that this was good news for financial markets. Market expectations among analysts questioned by Reuters before the budget varied widely between a balanced budget and a 2.3 billion dlr deficit. But none predicted a surplus. The forecast initially looks positive for both the bond and the foreign exchange markets, one analyst said. Paradoxically, the New Zealand dollar could rise in the medium term, despite lower interest rates, as overseas investors became more confident about investing in New Zealand, he said. However, some foreign exchange dealers disagreed, saying the local dollar is primarily interest rate driven and will move lower. The local dollar dropped to 0.5940/50 U.S. Dlrs in after hours trading, against 0.5970/77 just before the budget release. Analysts said the budget was also positive for the share market, despite an increase in the contribution of company taxation to revenue figures. One equities analyst predicted that the budget surplus announcement could push the share market up by 50 points tomorrow. The Budget statement was broadly as expected, with a continuation of existing policies, and the absence of traditional pre-election incentives would be viewed positively by overseas investors, another said. But one merchant bank economist said that certain anti-tax avoidance measures could damage some sectors of the share market, particularly multi-national companies. The government is also lowering its borrowing requirements, through bond tenders, as a result of the surplus. The requirement for the rest of the year is now down to 950 mln N.Z. Dlrs from a predicted 1.75 billion. Predicted revenue in the Budget looked sustainable and there appeared to be no holding back on expenditure, another economist said. He added that the document seemed entirely credible. "Altogether it looks good for Labour's election prospects," he said. An election is due before the end of September.