While interest rates here and abroad have dropped to record lows in response to the COVID-19 pandemic, the drastic measures taken to soften the economic blow will eventually see them rise sharply.

That's the warning from economist Cameron Bagrie, saying the next generation are going to end up paying for this rainy day.

In little more than a couple of weeks the Government has spent or set aside billions of dollars for wage subsidies and other measures intended to keep Kiwis in jobs and businesses running as the pandemic takes its toll.

Last week economist Shamubeel Eaqub predicted unemployment would double, with the tourism industry effectively shut down thanks to border controls, and others losing their jobs as businesses struggle through the lockdown.

Borrowing has never been cheaper, and the Government has been quick to splash the cash with near-unanimous approval from economists and even the Opposition.

But that won't last, Bagrie warns.

"The Government does not have a bottomless pit of money. At some stage we're going to have constraints," he told The AM Show on Monday.

"That's a long way away at the moment, but eventually rating agencies are going to be knocking on our door and having a bit of a look. We're not going to have the same credit worthiness."