Pacific Investment Management Company - the world's largest bond fund manager - is predicting a bleak year ahead for developed countries due to the failure of the traditional models for running their economies.
Its quarterly cyclical review forecasts zero growth for the developed world, with some countries tipping into recession.
Head of global portfolio management Scott Mather says there will be several more years of economic turmoil until countries work out new ways to tackle debt.
He points out that almost every major economy in the world is planning to cut fiscal spending and that will place a drag on growth in many cases of between 1% and 2%.
On New Zealand's outlook, Mr Mather suggests the country is better placed than most, despite falling commodity prices.
He says debt to GDP, although it could be better, is much lower than the rest of the world, so New Zealand has room to react to any shocks.
He says New Zealand also has monetary policy to manage the economy, in contrast to the United States where fiscal and monetary policy are increasingly ineffective or have to be very experimental.
Mr Mather believes Japan could be heading for a financial crisis while China is forecast to have 7% growth.