GDP grew at 0.8% in the first quarter of 2025 - stronger than even the most optimistic of economists’ forecasts.

Activity increased in the March 2025 quarter across all three high-level industry groups: primary industries, goods-producing industries, and services industries.

The Reserve Bank had forecast 0.4% for the quarter, but more recently, the consensus of economists moved to 0.7%.

There was a 0.5% rebound in growth in the last quarter of 2024, following a recessionary two quarters of contraction. That number was revised down today from 0.7%.

Economists had suggested that if GDP landed at 0.7% it would lift the odds that the Reserve Bank will leave interest rates on hold at its next meeting in July.

Today’s number signals a hold is increasingly likely.

“At a more detailed industry level, nine of the 16 industries increased, with the largest rises in business services and manufacturing,” economic growth spokesperson Katrina Dewbery said.

The rise in manufacturing was led by an increase in the production of machinery and equipment. This was reflected in increases for components of both investment and exports associated with this type of manufacturing output.

- MORE TO COME

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist and also presents and produces videos and podcasts. He joined the Herald in 2003.