However, the Kiwi economy is still 1.1 per cent smaller than it was a year ago, such was the damage from a 2024 recession, with warnings of dire times and tough choices ahead.
On Thursday, Stats NZ revealed growth figures for Q1 2025, which improved on predictions from the Reserve Bank (RBNZ)of an 0.4 per cent uptick.
"Nine of the 16 industries increased, with the largest rises in business services and manufacturing," spokesperson Katrina Dewbery said.
The quarterly jump is the best result in almost two years, with GDP per capita was also up in the March quarter, growing by 0.5 per cent.
Acting prime minister David Seymour called the result "a tribute to New Zealanders" and Finance Minister Nicola Willis described it as "great news".
"Hard working people have knuckled down through a very challenging period and today's figure summarises that," Mr Seymour said.
While politicians were pleased at the result, there's little doubt New Zealand is in a tough spot economically.
Two particularly troubled industries - mining and construction - posted growth of 1.0 and 0.5 per cent in the quarter, but are down 11.2 and 9.3 per cent over the last year.
BNZ senior economist Doug Steel said more recent data on services (two-thirds of the Kiwi economy) and manufacturing looked "nothing short of disastrous".
"There are clear warnings that the New Zealand economy has hit a brick wall in Q2 and this is despite the substantial revenue growth flowing from the agricultural sector," he wrote.
"Many businesses noted reduced demand and falling revenues due to rising costs, economic uncertainty and low consumer confidence."
Mr Steel said it made a clear argument for further stimulus from the country's central bank, which has already eased the official cash rate from 5.5 per cent last August to the current position of 3.25 per cent.
However, other banks point to the above-expectations headline GDP data as a reason to hold fire at the bank's meeting next month.
"We think the RBNZ will pause in July. Beyond that, it's a tightrope walk of what seems to be stagflationary risks. We do not envy the hand our friends (at the RBNZ) have been dealt," ASB Chief Economist Nick Tuffley said.
Council of Trade Unions chief economist Craig Rennie said the GDP figures showed the government's failure to spark the economy.
The right-leaning coalition, led by Chris Luxon, took office in November 2023 and has reined in public spending at a time when many, including the CTU, argued for a fiscal boost.
"The economy is still smaller than at the election in real terms. With more recent data suggesting that the economy is struggling to grow, there is a real danger that we return to slow, no, or negative growth," Mr Rennie said.
"There are 23,000 more people on Jobseekers (benefit) this year. 48 per cent of workers in New Zealand got a pay cut in real terms. Business and consumer confidence are at levels associated with recessions.
"One quarter of data shouldn't blind the government of the need for change."
New Zealand's Q1 bump is healthy compared to Australia's 0.2 per cent increase in the same three months - though New Zealand's 1.1 per cent contraction over the last 12 months is well short of Australia's 1.3 per cent growth.
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