The Reserve Bank says interest rates are unlikely to rise as high as in previous recoveries, because consumers and businesses are more cautious, banks are lending less and inflation poses a concern.
In the central bank's annual report, governor Alan Bollard says New Zealanders have changed their behaviour as a result of the recession.
Dr Bollard says households and firms are now more focused on reducing debt and saving more, while people are reluctant to re-enter the muted housing market.
That has resulted in a slower return to growth, with the recovery proving slow and fragile, he says.
However, Dr Bollard is encouraged by the shift away from consumption towards an export-led recovery, which he believes the economy needs to focus on.
Meanwhile, the surging New Zealand dollar hit its foreign exchange returns last year, with accounts showing a $111 million loss for the year to June.
The Reserve Bank will pay the Government a dividend of $335 million as it made some profits from selling foreign exchange during the year when the New Zealand dollar was cheaper.