Economists are expecting the Treasury to lift its forecasts of economic activity in the coming year when the Budget is delivered by the Government on Thursday.
Infometrics managing director Gareth Kiernan says that while the drought will knock momentum, growth has picked up again, fed by rising confidence, consumer spending and investment.
He says the Crown's target of returning its books to surplus by the end of June 2015 appears more likely now than it did last year.
A stronger economy is expected to help the Government meet its target of returning to surplus by the end of June 2015, but some argue its focus on spending restraint has come at the expense of jobs.
The Council of Trade Unions says jobs should be the Government's main priority, and it should do more to create employment, including more skills training and reintroducing employment schemes.
But Business New Zealand disagrees, saying restrained public spending and getting on top of debt will put the country in a better position to weather any future shocks.
