A shorter than expected lockdown and a swift rebound in consumer spending is likely to have softened the blow Covid-19's dealt to GDP growth.
The ASB bank's latest quarterly economic forecast expects GPD will fall by 14 percent during the June quarter, when the numbers are released next week.
Its a substantial improvement on it's earlier forecast, which predicted GDP could drop by as much as 19 percent.
The bank also expected the economy to shrink by about 5 percent for the year, an improvement on the 6 percent decline it forecast in May.
ASB's chief economist Nick Tuffley said the economy came out of the first lockdown better then expected.
"We do need to be mindful of the fact that whilst borders are closed, we are missing upwards of about 5 percent of GDP of our normal earning."
The most recent lockdown in Auckland took a toll, costing the economy about $1 billion in economic activity or about 0.5 percent of annual GDP.
ASB also had a rosier outlook for unemployment.
"We were at the worst expecting an unemployment rate to exceed 9 percent and we [now] see it exceeding 7 percent, so that's still quite a pick up from roughly 4 percent in the first half of the year but to put into context, given just what is happening, that's actually a far more encouraging looking outlook."
The latest GDP numbers will be released next week.