The International Monetary Fund says New Zealand's economy is stronger, but warns the Auckland housing market and a sharp slowdown in China could still pose a threat to growth.
In its annual stocktake, the organisation says the New Zealand economy's prospects have improved because of the rebuilding of Christchurch and high global commodity prices.
It predicts growth will be about 3.5 percent this year.
While house price growth has eased slightly due to lending restrictions, the IMF says it could still damage the financial system if there's an economic shock.
The IMF also says a sudden slowdown in China could hurt the economy, though it doesn't believe that's imminent.
The organisation has endorsed the Government's debt-reduction plan to ensure the country is in good shape to withstand any nasty shocks in the future.
