The New Zealand dollar rebounded in local trading after a survey showed local business confidence improved in the first quarter, shrugging off concerns the European debt crisis is worsening.

The weaker growth will also mean the government's expectations of returning to surplus by 2014/15 year will be under pressure.

All this means the Reserve Bank will not be raising interest rates until mid-2013, NZIER says.

Today's business mood survey comes with a large health warning.

The country’s economists have cheered up a bit.

NZIER boss says New Zealand's economy risks becoming like Greece or the US in the next few years.