WELLINGTON: New Zealand's economy is "turning a corner, but the challenges remain very real", according to the Pre-election Economic and Fiscal Update released on Tuesday.

The country's economy is turning the corner with projected growth meaning no recession, wages ahead of inflation, and more people in work, even as the impact of challenging global conditions and the North Island Weather Events weigh on the government's books, Xinhua news agency quoted Finance Minister Grant Robertson as saying.

New Zealand continues to feel the ongoing ripples of the economic shock from the global pandemic.

Earlier this year, the country also experienced its second-largest natural disaster, Robertson said.

This has been reflected in the government accounts.

While core tax revenue was NZ$3.9 billion ($2.31 billion) higher than last year, it was NZ$2.9 billion behind where Treasury had forecast it to be in May's budget, he said.

The country's debt levels are among the lowest in the world and well below the government's debt ceiling of 30 per cent, the Minister added.