Finance Minister Bill English confirmed today the government is concerned about a double dip-recession, echoing Prime Minister John Key's caution in the face of weak employment figures and a fast-slowing Australian economy.

"It's possible," he told journalists who asked about the potential for New Zealand to slip back into recession - defined as two successive quarters in which the economy shrinks.

The economy shrank 0.2 per cent in the September 2010 quarter. The next Gross Domestic Product figures are due out on March 24, covering the last three months of 2010, including a period of notably weak retail sales leading into Christmas.

"People are saving harder and paying down debt quicker than we thought," said English. "They're not rushing back to the shops. New Zealanders are being careful with their spending and not pumping themselves up by selling houses to each other."

Meanwhile, record high prices for export commodities were "not feeding through yet."

"There are risks that the Australian non-resource economy seems to be slowing down quite fast."

Key said yesterday that Australia's economic strength had been a critical element in "taking the edges off" New Zealand's experience of the global financial crisis and subsequent recession.