The economy, which emerged from five quarters of recession last year, is seen growing 3.1 percent in the year to March 2011 and by 3.2 percent in the 2012 March year, the NZ Institute of Economic Research (NZIER) said in a quarterly survey of forecasts.
That compares with consensus forecasts of 2.8 percent in 2011 and 3 percent in 2012, in the private think tank's December survey of seven banks, the Reserve Bank of NZ, the Treasury department, and the NZIER.
'Cautious optimism was reflected in modest upward revisions to most main indicators,' NZIER said.
The survey showed an unchanged consensus of a 0.4 percent contraction for the year to March 2010. Official data for the three months to Dec. 31 are due on Thursday with expectations of quarterly growth of 0.8 percent, but a fall of 1.5 percent for the year.
The survey also showed an expectation that unemployment, which hit a 10-year high of 7.3 percent in the fourth quarter, has peaked and will gradually decline, as the economy starts to generate more jobs.
Inflation is seen slightly higher at 2.4 percent in both years against 2.1 percent in 2011 and 2.3 percent in 2012 in December's survey.
'Forecasters are now mindful of a potential GST (goods and services tax) increase and a raft of administrative price increases in the March 2011 year,' NZIER said.
The government will unveil changes to the tax system in its May budget, which it has hinted might include a rise in the indirect value-added GST to pay for cuts in personal tax rates.
The Reserve Bank of NZ is required to keep inflation between 1-percent and 3-percent on average over the medium term, but has a policy to disregard one-off impacts when setting monetary policy.
Exports and imports are both forecast to improve strongly over the next two years as the global recovery boosts, while the current account is expected to remain narrowly in deficit.
NZIER said the consensus view was for a 'modest rise' in the NZ dollar's trade weighted index, but that masked a wide range between those expecting a move back to the highs seen last October and those picking a fall to the seven-year low touched last March.
(Reporting by Gyles Beckford)
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