"Fitch cites the large current account deficit, rising foreign indebtedness, the reliance on short-term foreign funding by banks and low household savings along with the volatility of the New Zealand dollar.
"But very little of those overseas liabilities are public debt. Fitch's calls for further cuts in public spending are therefore unjustified and should be resisted," he said.
Credit rating company Fitch affirmed the country's rating at AA-plus but changed the outlook to negative from stable.
ABN Amro Craigs broker Chris Timms said the Fitch report would be taken seriously because there was little else around for people to use as a benchmark on New Zealand.
"It will be looked at internationally as guidance on how an independent sees New Zealand going forward."
However, the majority of people made use of Standard and Poor's (S&P) to read the New Zealand's economy.
If Fitch downgraded New Zealand, it would cost the country more in interest to fund its overseas borrowing as the country would be seen as riskier investment destination, Mr Timms said.
Fitch's head of Asia Pacific sovereign ratings, James McCormack, said he thought New Zealand's current account deficit was a structural feature of the economy.
"It does tell us the economy as a whole is living beyond its means and borrowing money to finance that.
"When the economy is living beyond its means you can divide it into the public and private sector and the private sector is not saving enough money in New Zealand, so we think that if that is going to be the case going forward, then it comes down to the public sector to save money."
However, in the United States, Fitch is one of three credit rating agencies under fire by the largest public pension fund in the US in connection with $US1 billion ($NZ1.6 billion) in losses the fund said were caused by "wildly inaccurate" credit ratings from those agencies.
The New York Times reported that the suit from the California Public Employees Retirement system, a public fund known for its shareholder activism, was the latest sign of renewed scrutiny over the role that credit ratings agencies played in providing positive reports about risky securities issues during the subprime boom that had lost nearly all of their value.
The lawsuit, filed late last week in the California Superior Court, in San Francisco, was focused on a form of debt called structured investment vehicles, highly complex packages of securities made up of a variety of assets, including subprime mortgages.
The pension fund bought $US1.3 billion ($NZ2.01 billion) of them in 2006.
They collapsed in 2007 and 2008.
The fund maintained that in giving those packages of securities the agencies' highest credit rating, the three top ratings agencies - Moody's Investors Service, S&P and Fitch - "made negligent misrepresentation "to the fund which provided retirement benefits to 1.6 million public employees in California".
In its report on New Zealand, Fitch said that, despite the recession, the current account deficit remained large and was projected to remain above the level necessary to stabilise and reduce New Zealand's net foreign liabilities.
Before the Government's May Budget, S&P warned it would downgrade New Zealand if it was not satisfied with measures being outlined by Finance Minister Bill English.
In the end, S&P maintained its rating of New Zealand's economy.
Mr English told NZPA Fitch had identified the same problems as the Government.
"That is, we still have a high current account deficit and we're 10 years away from having a budget surplus. It's telling us there's a bit more work to do."
Mr Rosenberg reminded Fitch that nearly 90% of the current account deficit was due to net investment income flowing out of New Zealand, costing the country $13.4 billion in the year to March.
The bulk of that was interest and dividends on private liabilities and was not due to government debt.
Two-thirds of the international debt was due to banks borrowing overseas.
Mr McCormack said householders needed to change their behaviour.
Household savings were particularly low in New Zealand, even lower than they had been in the US.
They probably needed to go up to a higher level.
Mr Rosenberg said reducing debt and saving was hard for workers with reduced household incomes.
While agreeing in principle with the call for people to reduce their debt and save more, it was important to remember how difficult that was for many workers through no fault of their own.
"Households are being hit by increasing unemployment and reductions in paid work hours. Redundancies are forcing many of those affected to eat into their savings."
