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Treasury's updated forecasts this week will be roughly in line with the Reserve Bank's - showing New Zealand coming out of its recession - Treasury Secretary John Whitehead says.
But Mr Whitehead today said it was a difficult time to make any forecasts with certainty and despite the shallow recession ending, New Zealand would suffer low growth rates for some time yet.
The Treasury will release its half yearly economic update on Thursday. It will show the state of the Government's books and Treasury's forecasts for the next few years.
Mr Whitehead said because growth would be very low over the next year or so unemployment would continue to rise, likely peaking in the middle of 2010, before the economy picked up again.
"We've probably never been in so much uncertainty as we are at the moment in forecasting and I think the truth is nobody knows for certain," he said on Radio New Zealand.
The impact of the slowdown on the Government's books was probably worse than most people realised, he said.
Yesterday he took the unusual step of issuing a gloomy prognosis of the economic outlook just days ahead of Treasury's official update.
He told a business audience in Auckland that the economic pressure and the worst financial crisis in decades meant Treasury's figures would be much worse than those it presented in a briefing to new ministers just after the election.
It was difficult to predict what would happen next and there was the risk of further shocks.
New Zealand like other countries had seen interest rates cut and government moves to stimulate the struggling economy.
But interest rate cuts had not helped that much due to the cost of banks in getting money had also increased.
Increased spending by the Government was also possible due to the low levels of crown debt in comparison to other countries.
- NZPA
