GDP rose by 1.7 per cent in the June 2022 quarter, following a 0.2 per cent fall in the March 2022 quarter.
"We are now forecasting a higher OCR peak of 4.25 per cent in February 2023," said ASB senior economist Mark Smith.
"GDP was stronger than our expectations, with signs that momentum in the second half of 2022 will be also stronger than we have been anticipating," he said.
"This adds up to the risk that inflation pressures will be even more persistent."
The New Zealand dollar rallied by about 10 basis points on the back of the release, to US60.22c.
BNZ currency strategist Jason Wong said the market's reaction to the data was subdued.
"The underlying figures were actually pretty weak, if you look at the demand and expenditure figures," he said.
Exports were up 20.5 per cent and drove the GDP increase, he said.
"It wasn't really a sign of strength, put it that way."
The service industries, which comprised about two-thirds of the economy, were main drivers of the increase in domestic economic output, up 2.7 per cent.
"This is a positive result and underlines the resilience of the economy," Finance Minister Grant Robertson said.
"Our strong growth in the June quarter comes at a time the IMF estimated that global output shrank," he added.
Robertson said New Zealand was well-placed to face upcoming challenges.
"The global economic outlook is being revised downwards as high inflation, the war in Ukraine and ongoing pandemic-related disruptions continue to affect the countries we trade with."
National Party finance spokeswoman Nicola Willis said the economy was still underachieving.
She said inflation was at its highest rate in a generation.
"The economy is not growing enough to boost household incomes," Willis added.
"Real wages have fallen by 3.7 per cent in the past year, meaning most Kiwis are going backwards as their wages struggle to keep up with rising prices."
In the June 2022 quarter, households and international visitors spent more on transport, accommodation, eating out, and sports and recreational activities.
Border re openings and relaxation of local and global travel restrictions supported growth in industries impacted by Covid-19 response measures, Ruvani Ratnayake of Stats NZ said.
Ahead of today's announcement, bank economists had taken divergent views, with one picking only 0.4 per cent growth and another forecasting 1.6 per cent growth.
A recession happened when two consecutive quarters of negative growth were recorded.
GDP rose 3.0 per cent in the last three months of 2021 but fell 0.2 per cent in the first three months of this year.
Average annual GDP rose 1 per cent through the year to June 2022.
Activity indicators from business and consumer surveys had been very soft, as had retail sales and manufacturing data, ANZ senior economist Miles Workman said earlier this week.
Only the construction sector had been outperform expectations and Workman predicted 0.4 per cent growth.
But Westpac chief economist Michael Gordon highlighted the border reopening and resumption of overseas tourism as likely to boost travel services, accommodation, and arts and recreation.
He picked 1.6 per cent growth.
"A result in line with our view would emphasise that the New Zealand economy remains far from recession. Indeed, the challenge is one of an economy that is running too hot," he said earlier.
The economies of Australia, Canada, the European Union and UK all grew in the second quarter but the United States' economy shrank by 0.4 per cent.
Yesterday, new stats showed exports rose in the June quarter but New Zealand still recorded a trade deficit.
The country's seasonally adjusted current account balance was a $7.1 billion deficit in the June 2022 quarter, down $1.7b from the previous quarter.
Food costs have risen dramatically in the past year with Fruit and vegetable prices shooting up 15 per cent.
