New Zealand's double-A credit rating has been put on notice for a possible downgrade.
International ratings agency Standard & Poor's put the country on negative credit watch on Monday.
The agency says it is concerned about New Zealand's high debt levels.
It says it could impose a costly downgrade if the country's indebtedness does not improve.
The ratings agency has highlighted New Zealand's high levels of external debt.
The current account balance recently widened to about 3% of gross domestic product.
Standard & Poor's analyst Kyran Curray says New Zealand is vulnerable to external shocks, which raises risks to the country's economic recovery and credit quality.
To avoid a downgrade, there would need to be a sustained improvement in New Zealand's external position and the Government would need to maintain a sound fiscal position.
Prime Minister John Key says next year's Budget could contain measures to tackle the country's high foreign debt.
Mr Key says this year's Budget was designed to encourage less borrowing for houses and more savings.
But he says more could be done to boost the country's savings levels.