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The governments fiscal advisor forecast growth would average around 2.7 percent a year over the next five years in the Half Year Economic and Fiscal Update.

While the uncertain global outlook remained a concern, Mr Makhlouf said the domestic economy was humming, buoyed by record visitor and migrant arrivals and low interest rates.

He expected the Treasury would upgrade its forecasts when the budget rolled round in late May.

The economys growing. When we come out with our economic forecasts at budget time, Id expect those to be more positive than they were at the half-year forecasts in December.

But some commentators say more needs to be done to stave off the risk of global deflation, and the effect it could have on growth.

The chief economist of economic research and analysis company Berl, Ganesh Nana, said the stimulus from the Reserve Bank cutting interest rates was rapidly losing its punch, and he urged the government to aggressively adopt an old-fashioned idea of pump priming the economy by fast tracking infrastructure projects in the regions.