The world's largest fund manager has increased its investments in New Zealand as it forecasts a dire outlook for Europe and weak growth in the United States.
Pacific Investment Management Company (Pimco) is predicting lower global growth this year than last year, with Europe contracting by 1% and the US growing less than 2%.
Pimco's head of global portfolio management, Scott Mather, also predicts more turmoil for Europe and says the European Union is closer than six months away from breaking up.
He says the period of tranquillity on the money markets is about to change.
Mr Mather says central banks around the world are likely to continue to do what they have been doing.
"Those that have 0% rates are likely to keep them, those that are above 0 may move closer to 0 in terms of having this weak growth and inflation environment, and the ones that are doing experimental policies - the quantitative easing, the other balance sheet expansions - those are likely to continue."
He says that's likely to lead to more monetary stimulus to try to offset the weak environment.
Praise for NZ economic management
Mr Mather says that overall debt is still rising quite rapidly as a percentage of GDP in most regions of the world, and that until a way of containing it is found, it will not be possible to get the global economy on a stable footing.
He says until the debt problem is solved a period of rolling crises can be expected.
Mr Mather says Pimco has lifted its investments in New Zealand government bonds by about 5% or $US3 billion in the past two years.
He says New Zealand is one of the few countries with a stable debt dynamic and a good credit profile and in his view it will be increasingly viewed as a place that's safe to invest relative to the rest of the world.
Mr Mather says that's a mark of successful economic management.