Rebounding dairy production drove a 1.4 percent increase in gross domestic product (GDP) for the September 2013 quarter -- the biggest quarterly increase since December 2009, Statistics NZ (SNZ) said.
The increase beat the 1.1 percent expansion predicted by a Reuters survey of economists.
SNZ said a strong increase in dairy production was the main contributor to a 17.0 percent rise in agriculture, which makes up about 5 percent of the New Zealand economy.
"Dairy farming has really bounced back from the drought this year," acting national accounts manager Steffi Schuster said. "The increase in agriculture is the largest in more than 25 years, as good weather boosted production well above the weak June quarter," she said in a statement.
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Economic activity for the September year was up 2.6 percent.
SNZ said dairy product manufacturing also increased during the quarter, which contributed to a 1.5 percent rise in total manufacturing.
Westpac the quarterly outcome was in line with its own forecast.
``The drought and the subsequent recovery has left an uneven GDP growth profile over the course of this year, but today's figures reinforce that the New Zealand economy is firmly in the grip of a widespread upturn,'' Westpac said in a commentary.
``From our perspective, the economy is behaving closely in line with our long-held forecast,'' Westpac said. ``We continue to expect a bulge of GDP growth over 2013 - 2015, associated mainly with post-earthquake rebuilding activity and robust construction elsewhere in New Zealand,'' it said.
The outcome was stronger than the Reserve Bank's forecasts. ``Therefore this data will make the central bank feel more inclined to hike the official cash rate. ``We continue to regard March 2014 as the most likely date for the first OCR hike,'' Westpac said.
The rate currently stands at 2.5 per cent but most commentators expect the central bank to start its tightening cycle early next year.