New Zealand's Treasury predicted on Tuesday that the country's recession deepened in the first quarter.

In its monthly update, the Treasury forecast that the Gross Domestic Product shrank 1 percent in the first quarter, a sharper decline than any of the four quarters of the recession to date.

The Treasury said data over the past month indicated that demand and output contracted further in the first quarter.

It attributed the weakness to falls in household spending, business investment and exports.

Growth estimates for New Zealand's trading partners are now well below those contained in a previous update in December.

Official figures on the state of the economy in the first quarter are due to be issued at the end of June.

The government's Budget report will be presented on May 28.