Interest rate cuts now may have little impact because the issue globally is the availability of credit not the price of credit, said Berl in its latest forecast report.
The independent economic researchers said the hits to the New Zealand economy just keep coming. They include drought, higher prices for food and petrol, finance company collapses, a residential property market slump and now contaminated milk in China.
But the events in the US financial system this week eclipse them all.
"The high interest rate policy of the previous two to three years had succeeded in bringing the New Zealand economy to a halt in order to rein in inflation.
"But our timing could not have been worse."
The prospects for the New Zealand economy were looking increasingly weak.
"GDP growth is expected to be a miserly 0.2 percent in the year to March 2009," Berl said.
Berl said that there was a danger that knee-jerk policy responses could instil a sense of crisis management of the New Zealand economy.
