The Treasury forecasts that 68,000 New Zealanders will lose their jobs in the next 15 months.
But if the international recession worsens, it says, that figure could reach 87,000.
That would mean 162,000 unemployed, or as high as 181,000.
It also forecasts much bigger deficits than it did before the election - $11 billion within five years.
And it says financing the deficit will send Government debt soaring, from 17.5 per cent of gross domestic product to 33 per cent in five years and much, much higher beyond that
But Finance Minister Bill English yesterday said he was not willing to accept persistently rising debt as a given.
"We are not going to let this happen," he said.
Dealing with a persistently rising burden of debt would be too big a burden for future workers.
A combination of effective management of Government spending and higher than expected growth rates would turn the debt track around, Mr English said, "and we are determined to do so".
