Gross domestic product rose 0.8 percent from the previous three months, Statistics New Zealand said in Wellington.
The economy grew 0.4 percent in the fourth quarter from a year earlier. It was the first annual growth since the second quarter of 2008.
Bollard said this month the economy is recovering from a recession that ended in the second quarter of last year, buoyed by rising consumer confidence and spending. Confidence surged to a three-year high in January, according to an index compiled by Roy Morgan Research and ANZ National Bank Ltd.
Household spending, which makes up 60 percent of the economy, rose 0.9 percent. Sales of used cars, home appliances and other so-called durable goods gained 1.4 percent. Purchases of food and non-durable items also increased. Spending on services fell, led by health and life insurance.
Manufacturing rose 4.5 percent, the first increase in eight quarters, led by output from food, metal and chemical processing. Inventories increased for the first time in a year as manufacturers rebuilt stocks, anticipating increased demand, the agency said.
Investment in residential building jumped 4.8 percent. Total construction fell after declines in work on commercial offices and government buildings.
Output from primary industries fell in the quarter, led by mining. Farm output increased 1.1 percent.
Business investment fell 2.5 percent, today’s report showed. Investment on exploration and software dropped 26 percent. Commercial construction also declined, while companies spent more on plant, machinery and transport equipment.
Exports of goods and services fell 0.9 percent led by a decline in dairy products, logs and reduced spending by tourists. Imports rose 6 percent, buoyed by machinery and transport equipment purchases, and spending by citizens traveling overseas.
Net exports subtracted from growth. Excluding exports and imports, gross national expenditure surged 3 percent in the quarter, the agency said.
Growth may accelerate this year as Prime Minister John Key plans to cut personal and company tax rates in the May 20 budget, boosting household incomes and investment. Reserve Bank Governor Alan Bollard said on March 11 he expects to raise the benchmark interest rate from a record-low 2.5 percent around the middle of the year as the economy recovers.