This was double economists' median forecasts of 0.4 percent and ahead of the Treasury's forecast of 0.6 percent in the Pre-Election Fiscal and Economic Update. The country will hold the three-yearly general election next month.
"The New Zealand economy is doing better than expected," Finance Minister Grant Robertson said, adding this was stronger than expected growth in the June quarter.
New Zealand GDP's annual growth stood at 3.2 percent, with the size of the economy at 395 billion NZ dollars (233.25 billion U.S. dollars), bigger than it was pre-COVID, Robertson said.
"Business services was the biggest driver of economic growth this quarter, largely due to computer system design," Stats NZ's economic and environmental insights general manager Jason Attewell said.
Transport equipment and machinery manufacturing drove higher activity in the manufacturing industry in the June 2023 quarter, Attewell said, adding manufacturing activity increased this quarter after five consecutive quarters of decline.
Following the impacts of Cyclone Gabrielle earlier this year, both education and transport, postal and warehousing grew this quarter after a decline in the March quarter, he said.
Agriculture, forestry and fishing, which was also impacted by extreme weather events, fell in both the March and June quarters, Attewell said.
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