Photo: RNZ / Marika Khabazi
The rapid rise in migration and the resurrection of the tourism industry could see the economy cling on to growth for longer than expected, though an economic downturn is still forecast for later this year.
The latest labour market data shows unemployment remains at near-record lows, at 3.4 percent, though some economists are picking the labour market is close to its peak.
BNZ head of research Stephen Toplis said the economy was still on track for a likely recession, as signalled by high interest rates and the high cost of living putting household budgets under more pressure.
"We're in a weird world here, where we're seeing higher interest rates, rising cost of living pressure on households and that tells us we're heading into the recession.
"But on the other side of the fence, we've got this rapidly rising increase in population, thanks to migration and a resurrection of the tourism industry.
"So there's this real tug of war going on there and we're not exactly sure which way it's going to go, all we're saying is don't rule out the fact that migration and tourism might keep us afloat for longer than we expect."
Toplis said these factors were unlikely to be strong enough to offset the negative factors however, with the economy expected to contract in the second half of of this year.
He said the Reserve Bank was unlikely to ease up on hiking the official cash rate just yet and expected another 25 basis point rise later this month.