The economy was little short of red hot as free-spending consumers, strong agricultural production and exports drove activity.
Big-spending consumers helped drive economic growth, figures show. Photo: 123RF
Official numbers show gross domestic product (GDP) rose a seasonally adjusted 2.8 percent for the three months ended June, after it grew by a revised 1.4 percent in the previous quarter.
Consensus forecasts were for a rise of about 1.3 percent.
"The June 2021 quarter experienced fewer Covid-19 restrictions than previous quarters affected by Covid-19," Stats NZ senior manager Paul Pascoe said.
"Many industries experienced activity at or above pre-Covid-19 levels, while some remained below."
The economy grew 17.4 percent compared with the same quarter last year, and the annual average rate was 5.1 percent, although those figures were inflated by the hit of the first lockdown last year.
The services industry, which makes up about two-thirds of the economy, grew 2.8 percent, with retail, food, and accommodation significant drivers.
"Opening the trans-Tasman travel bubble with Australia in the June 2021 quarter also contributed to services industries with links to tourism, such as retail and accommodation, and transport," Pascoe said.
Agriculture and forestry were up 5.5 percent, while the construction sector grew by 1.3 percent over the past quarter.
However, the growth numbers were regarded as being overtaken by events.
"We are of the view that the NZ economy had maintained strong momentum heading to the mid-August lockdown. Nevertheless, a sizeable Q3 contraction to overall GDP looms," ASB chief economist Nick Tuffley said.
"Uncertainty is pronounced but we are hoping that the current community outbreak in Auckland is contained, setting the scene for a swift Q4 bounce in GDP given pent-up demand, and the ingenuity and resilience displayed by households and firms."
He said the Reserve Bank might choose to look through the short term volatility caused by the lockdowns and concentrate on inflation pressures which have been pushing through an annual rate of 3 percent.
"As such, the path of least regrets for the RBNZ still necessitates some removal of monetary stimulus."
Tuffley said ASB was still looking for quarter percentage point rise in early October, November and next February.
