The International Monetary Fund is predicting New Zealand's economy will contract sharply this year, despite saying this country is better placed than most to withstand the global downturn.
The organisation, which monitors the health of the global financial system, expects the economy to shrink 2%.
The IMF forecast is more pessimistic than one released by the Reserve Bank earlier this month.
The IMF says there is a high chance the economy will fare worse than expected, due to the uncertainty surrounding the likely depth of the global recession.
However, it says sound banks, a flexible exchange rate and low levels of government debt mean New Zealand is better placed than most countries.
IMF delegates have been meeting government officials and business and union representatives during the past week.
Meanwhile, the New Zealand Institute of Economic Research has averaged the forecasts of the country's economists, and found all have revised their expectations downwards. On average, economists now expect two further quarters of contraction before a recovery to 2.7% growth in 2010-11.
Demand slump hitting exports - report
A collapse in world trade will put New Zealand's economy at even more risk in the next 12 months as demand for exports dries up, according to a report by credit research company Dun and Bradstreet, which pools data from 132 countries.
At same time, the World Trade Organisation is predicting that global trade will fall 9% this year - the biggest fall since the Great Depression, which began in 1929 and continued into the 1930s.
World trade tapered off sharply in the last half of 2008 to show growth of 2% over the whole year, after rising 6% in 2007, the WTO report said.
Dun and Bradstreet's New Zealand director, John Scott, said the economies of 70 countries are contracting, including those of New Zealand's main trading partners.
Mr Scott said the report shows year-on-year figure for imports to China plummeted by 43% and that demand is drying up for goods New Zealand is trying to export.