A weakening in the Australian economy would have implications for New Zealand's growth says Finance Minister Bill English.
"As an illustration of the risks to the New Zealand economy we have had, alongside the Kaikoura earthquake, the Australian economy showing a negative quarter in its most recent GDP figures," he said.
"I take the view that Australia is a resilient economy and it's unlikely that they're on some path to significantly lower GDP.
"However, there is a scenario where if Australian GDP stayed low, that would have a number of implications for our economy from bank credit ratings through to exports and currency changes."
Mr English was speaking after the Treasury had released its latest update, forecasting stronger than expected economic growth and budget surpluses steadily rising to $8.5 billion in the 2020/21 financial year.
He said that although New Zealand was making good progress there were global risks.
Along with Australia's situation, he mentioned the impact of Brexit on the UK economy and uncertainty about progress in global trade integration.
Earlier on Thursday, Reserve Bank governor Graeme Wheeler said the prospects were good for continued strong growth in the New Zealand economy.
He said that in the absence of major unanticipated shocks, economic growth was likely to be driven by construction spending, continued migration, tourist flows and accommodative monetary policy.
However, he said 2017 would bring considerable political and economic uncertainties, with the bursting of the housing bubble a major risk.