There's no free lunch in the economy.

Today's Treasury forecasts show New Zealand will slip into a recession next year.

Treasury boss Caralee McLiesh, is also warning unemployment will go up, but inflation will start to head back down. And Finance Minister Grant Robertson is warning that a challenging 2023 lies ahead.

Independent Economist Cameron Bagrie says there's a big economic cost to taming inflation.

"If you scroll those numbers into what it means for the number of people on a benefit in New Zealand, we're likely to see the number of people on a benefit in New Zealand go from 340,000-350,000 up in excess of 400,000. That's more than one tenth of the population going to be on a benefit."

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