English cautious on recovery talk

Finance Minister Bill English says it's too early to be sure about the extent of an economic recovery and more rapid growth is needed to absorb jobs that have been lost.

The Treasury yesterday said there were signs the housing market and the wider economy were beginning to grow again and that unemployment would not reach the 8 percent it earlier predicted.

Mr English told reporters today any uplift was good, particularly if it helped preserve jobs.

"Our concern is that in the longer term we need a sustainable recovery -- a recovery that is built on more debt and higher prices for houses isn't going to last too long," he said.

"We're looking for how to make sure we get a sustainable, export-led recovery." Asked whether it was too early to say the economy was "coming right", Mr English replied: "Yes, it is too early. We're coming off the bottom of a long recession but we need to have the economy moving quite a bit faster to absorb the jobs that have been lost and give people a sense of job security.

"That's our task over the next two or three years." The Treasury's monthly economic indicators report for August said there were signs of a fragile recovery in the global economy and this made a stronger recovery in New Zealand more likely than it had earlier forecast.

But not all the news was good -- there were signs that already indebted households were once again being offered interest-free deals to buy consumer goods.

Prime Minister John Key said yesterday it was up to households to decide how much debt they could handle.