New Zealand's economy is stagnant and is only halfway through the struggle, according to a leading economist.
After three years of flat economic growth, Shamubeel Eaqub from the New Zealand Institute of Economic Research told TV ONE's Breakfast today the outlook is still challenging.
"The fact of the matter is that we're paying down debt, and that's going to take a long time to get out of this," he said.
"And we have big risks in the global economy, and they're not going to be resolved quickly."
Eaqub said though New Zealand has started paying down debt, it has not paid off much at all.
"We borrowed for about 15 years - it's going to take us a few years to get us back to more normal levels. As people with mortgages will know, it is easy to take on the mortgage, but it's hard to pay it off."
Though mortgage rates are low, they are only being used to pay down debt, said Equab.
"It's a fantastic time to pay it down," he said.
Earlier this month there were frenzied cuts to fixed home loan interest rates amongst all the major banks, a delayed response to Kiwibank's initial 4.99% one year special at the end of April.
He said New Zealanders saving rather than borrowing more when interest rates are low is the "paradox of thrift".
"You shouldn't be saving when interest rates are low, but the fact of the matter is this is what we have been waiting for for the last 15 years - that New Zealand should be saving more. We're finally doing it despite very low interest rates."
Eaqub said the NZIER is less optimistic about the Christchurch rebuild ramping up growth any time soon.
"You have to be realistic - there are lots of practical issues with getting the rebuild underway in Canterbury. We're still having lots of aftershocks, still big issues with insurance, building code, and getting the right kind of people to do the work."
He said there will eventually be a lot more work in Canterbury, but it will take time.
"It's really a case of being drearily similar to the last three years. We're not going to have a lot of new jobs, income growth isn't going to be much more above living costs, and things are going to feel kind of ok, but not really improving."
Eaqub said the adjustments the country is making "must happen", but it is "just not going to feel like fun".