Forecast growth will be lower than expected in the half year economic and fiscal update to be released next month, Finance Minister Bill English says.

He said the economy was recovering but growth would not really pick up until next year.

Exports were increasing and unemployment dropping, with more than 40,000 now in jobs than at the same time last year, Mr English said in his speech to the Cullen Employment Law Firm breakfast today.

The recovery was a sustainable one based on savings and investment rather than borrowing and consumption, he said.

That trend created a strong platform for faster economic growth and would create jobs, higher incomes and better living standards in the medium- to long-term.

"In this new world, growth will need to be based on savings and investment and it will need to be led by the earnings side of our economy -- namely the export sector," Mr English said.

The change meant a flatter economy in the short term because growth was not driven by the retail and housing sectors, he said.

Forecast growth for the year to March 2011 was likely to be lower than expected but would bounce back the following year.

Low growth was also impacted by the weak global outlook and fiscal impacts of the Canterbury earthquake.

"It will mean slightly higher deficits in the short term before improvements show through."

The Government would publish its first Investment Statement at the same time as the half year update.

That statement would set out the Crown's assets and liabilities and identify emerging issues, Mr English said.

"The Crown is the largest single investor in a capital constrained economy. It is therefore vital that the Crown invests its capital efficiently.

"We believe this level of transparent information -- in a regular publication -- will allow the public to demand a much greater level of accountability from the Government," he said.

(Source National Business Review)