It's all doom and gloom this week at Treasury, which has trimmed back its growth forecast for the next couple of years.
It is predicting 1.9 percent expansion in GDP for the year ending March 31, and 2.8 percent for 2013 – down from previous estimates issued last year of 2.3 and 3.8 percent respectively.
Growth in 2014, on the other hand, is now expected to hover around 3.8 percent, rather than 3.3.
The first half of 2012 is at particular risk, according to the Treasury, falling as it does between the Rugby World Cup and the projected increase of rebuilding activity in Christchurch, which will then fuel growth from 2013 on.
Finance minister Bill English confirmed the government’s commitment to return to operating surplus by the 2014/15 year, $370 million.
The forecast operating deficit before gains and losses rose to $12.1 billion in 2012 from an original prediction of $10.8 billion. This is expected to shrink to $5.6 billion in 2013 and $2.2 billion in 2014, returning to surplus in 2015.
The unemployment rate is forecast to stay above 6 percent until 2013, rather than 2012.
But inflation is tipped to soften – the CPI is forecast to hold steady at 2 percent this year and next, before rising to 2.3 percent and 2.4 percent in subsequent years.