The IMF has done an annual assessment of the New Zealand economy, and Asia-Pacific representative Ray Brooks noted household debt and external debt were high.
Areas outlined by the IMF for policy changes and savings included Working for Families, student loans and free doctors' visits, which were brought in under the previous Labour government, but Mr Key said he didn't intend making changes to those policies, Radio New Zealand reported.
"We are holding new budget spending at $1.1 billion, we will be doing that into the foreseeable future -- it's roughly about a third of what the previous government did," Mr Key said.
He said New Zealand had done a better job of reducing expenditure in the Crown accounts over the past several months than some had thought.
"We've cut around about $2b over four years out of expenses..."
Green Party leader Russel Norman said the IMF had for many years had hard right wing economic policies.
"It was of course a champion of the new right revolution in the 80s and 90s, which produced dramatic inequality in New Zealand, which now has dramatic costs on the taxpayer," he told Radio New Zealand.
He said examples were the spiralling cost of the prison system here, and other social and economic costs that come with inequality.
"So the IMF tend have a pretty short-term focus."
The IMF supported the proposal to lift GST and cut income tax rates.
