After a year of interest rates resting at record lows, the Reserve Bank is expected to begin raising rates later this week.

The central bank releases its Monetary Policy Statement on Thursday.

And most economists are picking interest rates to rise by 0.25% to 2.75%.

But returning rates to a more normal level is expected to be a slow and steady process, especially as nervousness about Europe's sovereign debt problems lingers.

ASB economist Chris Tennent-Brown says recently released domestic data paints a picture of a self-sustaining recovery.