New Zealand's GDP (Gross Domestic Product) rose by 2.8 per cent for the June quarter.
Finance Minister Grant Robertson said the increase was "significantly better" than most forecasts - adding the Government was allocating an additional $7 billion into the Covid-19 Recovery Fund.
"There is also an additional $3 billion available to spend from money previously allocated in the fund that has not been spent," he said.
Last month, Robertson defended the Government's use of the $50 billion fund, saying it had "done exactly what we wanted it to do".
The figure was a snapshot prior to the Delta outbreak, with the quarter's rise said to be led by service industries. It was also 4.3 per cent higher than the December 2019 quarter, before Covid-19 hit.
Stats NZ's Paul Pascoe said retail, especially food services, and accommodation was the biggest contributors to the growth.
"The June 2021 quarter experienced fewer Covid-19 restrictions than previous quarters affected by Covid-19," Pascoe said.
"Many industries experienced activity at or above pre-Covid-19 levels, while some remained below."
He said prior to Covid-19, the June quarter usually showed a large drop in international travel activity - however the previously opened trans-Tasman bubble contributed to services industries like tourism and accommodation in the quarter.
The trans-Tasman bubble has been suspended since July.
"Household consumption expenditure fell 1.4 per cent in the June 2021 quarter, due to a 1.9 per cent decline in household spending on services."
ACT's David Seymour said before the GDP release that it would be a "helpful reminder that outside the Government’s tunnel vision approach to Covid, the troika of debt, inflation, and uncertainty are killing business".
"Today’s figures need to be seen in the context of wartime levels of borrowing by the Government. They believe interest rates will be low forever, but if they’re wrong it’s the next generation that will pay," he said.
Robertson said the strong GDP increase "has been reflected in the Government’s books, with lower deficits and debt position than had been predicted, and well below that of other nations that we compare ourselves against".
New Zealand was in a strong economic position "to protect lives and livelihoods and plan for the gradual and careful opening up of New Zealand to the rest of the world to secure the recovery".
It followed a 1.4 per cent increase for the March 2021 quarter. June 2020 quarter saw a decrease of 9.9 per cent.