A stark warning over our economy.

A new International Monetary Fund report says our economy will grow about one percent next year, and inflation won't return to the target band until 2025.

It's also warned the Government it should cut back on spending and raising interest rates.

Infometrics chief economist Brad Olsen say the risk factors aren't good if inflation and wages challenges linger.

"The Reserve Bank might well be forced to do more. And if that's the case, if they have to raise interest rates further, that could well see a much tougher economic environment."

LISTEN ABOVE

A stark warning over our economy.
A new International Monetary Fund report says our economy will grow about one percent next year, and inflation won't return to the target band until 2025.
It's also warned the Government it should cut back on spending and raising interest rates.
Infometrics chief economist Brad Olsen say the risk factors aren't good if inflation and wages challenges linger.
"The Reserve Bank might well be forced to do more. And if that's the case, if they have to raise interest rates further, that could well see a much tougher economic environment."
LISTEN ABOVE

With a straight down the middle approach, Heather du Plessis-Allan Drive on Newstalk ZB delivers the very latest news and views to New Zealanders as they wrap up their day.

Heather du Plessis-Allan Drive

Brad Olsen: Infometrics chief economist on the new IMF report predicting our economy will only grow 1 percent next year and inflation won't return to target