The NSW government has pared back its expectations for economic growth and forecast the state's unemployment rate will climb to its highest level since the global financial crisis.

The half-yearly budget update released on Thursday predicts the jobless rate will hit 6.25 per cent next financial year, well up on the previous forecast of 5.5. That could mean about 20,000 more unemployed workers than there are now.

"We will take whatever actions are necessary to get NSW back on to a financially sustainable basis": NSW Treasurer Mike Baird. Credit:Alex Ellinghausen

Separate Bureau of Statistics figures on Thursday showed the NSW rate was 5.9 per cent in November, up from 5.1 per cent a year earlier.

Treasurer Mike Baird said the forecasts showed the economy continued to confront challenges, including an uncertain global economic outlook.