Prime Minister John Key says the Treasury is forecasting strong wage and employment growth over the next few years.
The exact details of the forecasts will not be revealed until the Budget on Thursday, but Mr Key says the growth in average weekly wages is expected to "well and truly" outstrip inflation.
Asked by reporters on Tuesday if that would mean wage increases of 4% to 5% a year, Mr Key replied that might be an educated guess.
Mr Key says there a lot of factors indicating that growth will improve, including the Rugby World Cup, the re-building of earthquake-hit Christchurch and strong commodity prices.
