The Treasury predicts New Zealand's recession deepened in the first quarter.
It forecasts that Gross Domestic Product shrank 1% in the March quarter - a sharper decline than any of the four quarters of the recession to date.
In its monthly update, the Treasury says data over the past month indicates that demand and output contracted further in the first quarter.
It attributes the weakness to falls in household spending, business investment and exports.
Growth estimates for New Zealand's trading partners are now well below those contained in a previous update in December.
Official figures on the state of the economy in the first quarter are due to be issued at the end of June.
The Budget will be presented on 28 May.