The slide in worldwide sharemarkets will have some impact on New Zealand, but Prime Minister John Key says the economy is in reasonable shape to deal with it.
Mr Key says New Zealand isn't immune to the effects of a global selloff of shares.
"It's a bit of a wake-up call for people that markets don't ever go only in one direction," he told reporters today.
"I just urge people to be cautious because just like dairy prices, markets very infrequently go one way forever."
How much impact it will have on the economy won't be known yet, but Mr Key says New Zealand is in a "helluva lot better shape" than most other places to weather it.
"Our balance sheet's back in order, we've got ourselves back pretty much not spending more than we earn, households have been saving for the last five years and the drop in the exchange rate does have quite a big impact," he said.
Mr Key hasn't seen anything to suggest New Zealand is heading for a recession, though economists are saying the probability of that has increased slightly.
"The likelihood is we'll grow, but we'll grow at slightly lower rates than we've anticipated."
The New Zealand sharemarket has so far weathered the global storm better than others.
The benchmark S&P NZX 50 Index was down 1.2 percent in early afternoon trading after opening 2.4 percent lower than yesterday's close.
On Wall Street the Dow Jones Industrial Average closed 3.58 percent lower after plunging six percent overnight and Japanese stocks were down about 3.5 percent in early Tuesday trading.