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Prime Minister John Key does not think New Zealand's credit will be downgraded after Finance Minister Bill English's first budget on Thursday.

Three executives from ratings agency Standard & Poor's are in the country looking at whether to take its AA+ rating off negative watch and back to stable, or to downgrade it.

S&P's wanted to see operating surpluses to be recorded within three to five years.

Key told the Breakfast show on TV One that a downgrade would add up to 2 per cent to interest rates.

"That's every homeowner, every business paying 2 per cent more."

He could not guarantee there would be no downgrade, but did not think it would happen.

"Bill's done a very good job, he's got on top of the debt curve, he's made the right arguments."

The Government had preserved entitlements such as pensions and interest free student loans, but belts were being tightened.

"Going forward you are going to see less spending and the government has been finding savings."

Some groups may not like the budget, he said.

"If you can spend money you keep people happy...we're not in a position to do that."

Asked if surpluses could be achieved in five years, Key it might take longer.

'Might be slightly further out than that," he told NewstalkZB.

Reliable estimates were difficult to make beyond two years, he said.

"We're getting on top of debt, it starts coming down, we've got a plan for the economy, we are doing some sensible things...we don't have a lot of room to move."

S&P analyst Kyran Curry told the New Zealand Herald the agency would be looking for the Government "to articulate a path to a more fiscally conservative or a more stable fiscal position".

"By that we mean either prioritising its spending or just doing what it needs to do to rein in some of those operating deficits that were articulated in the fiscal and economic update in December."

NZPA