The pace of New Zealand's economic recovery is coming off.

The latest forecast of the New Zealand Institute of Economic Research is putting a slow down in growth to 2.5 percent, after a strong 3.4 percent growth this year.

Principal economist Shamubeel Eaqub says there are still the risks of Auckland's over-valued housing market and weaker global growth having an impact.

"There is always that risk house prices come off and if that happens then a lot of the confidence, a lot of the wealth that's been generated might go away. On the global economy, the fears of a global downturn, particularly in places like Europe and parts of the emerging markets like China have increased."