More prisoners could be double-bunked or put in container cells to cope with a forecast increase in prisoner numbers, says Corrections Minister Judith Collins.
The prison population reached an unexpected high of 9360 inmates last month and is set to rise further.
The rise in numbers came despite a 17.5 percent drop in the crime rate in the last five years.
Ms Collins said prison numbers were rising because of the stronger stance on violent offenders.
She told Morning Report prisons could cope with the increase without the need to build another prison.
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"Corrections always tries to maintain a buffer of well over 1000 beds, but also there is the ability to put in more double bunking, which has actually been incredibly successful."
Ms Collins said she would not comment on whether prisons would get more money in the Budget in May.