The Organisation for Economic Co-operation and Development says New Zealand is in better shape than most to cope with the global credit squeeze and surging food and oil prices.
OECD secretary general Angel Gurria is in New Zealand to talk to the government about the pressures on the global economy, and the Government's responses to the turbulence.
Mr Gurria says New Zealand is not alone as it struggles to recover over the coming year, with many nations facing slowing growth, and rising unemployment.
New Zealand's main banks, all Australian-owned, face greater scrutiny about their exposure to the US economy and risky investments.
Mr Gurria says the banks are sound, but he admits regulatory authorities, including the OECD, could have done more to warn about the dangers of increasingly risky financial instruments.
He says national regulators and global organisations are taking action to promote financial stability.
Higher dairy payouts, upcoming tax cuts and lower interest rates are expected to provide some buffer for the faltering economy.
But with inflation set to hit 5% in the September quarter, Mr Gurria says the menace of inflation should not be underestimated.
He also says the Government needs to do more to lift New Zealand's poor productivity performance.
