-
Watch Video
-
Related
Prime Minister John Key says there could still be tough times ahead, but New Zealand is unlikely to face a deep recession.
His comments come as the Reserve Bank and Treasury offer slightly different views on the country's economic position.
The Reserve Bank last week said it believed New Zealand had moved out of a shallow recession into a very shallow recovery.
But Key has said Treasury's half-yearly December economic update will show the government's books have deteriorated even since its pre-election update in October.
Its forecasts for the economy will also be considerably more grim.
Key says the two agencies hold slightly differing views and it is too early to say if the worst is over.
"It's a little bit early to tell I think," Key said on TVNZ's Breakfast.
"Treasury's view is that the recession will be a little bit deeper and we'll come out a little bit more aggressively. It just depends on how long you think it's going to go for.
"My own view is that we won't have a really, really, deep recession, providing the world doesn't have a catastrophic meltdown."
Key says he believes the liquidity crisis is now over, but business and investor confidence will take longer to return.
Speaking on Agenda, Key said economic issues would form part of his speech that will be read out on Tuesday in the new parliament by Governor-General Anand Satyanand.
National has promised action on the economy, including legislating before Christmas for its April 1 tax cuts, making changes to KiwiSaver and putting in place a transitional relief package for those who lose their jobs.
