New Zealand’s GDP increased by 3% in Q4 2021, undershooting economists’ expectations, yet surpassing central bank forecasts.

This followed on from a 3.6% decline in Q3 last year, according to findings published by Stats NZ.

The GDP figure takes New Zealand’s annual growth rate for last year to 5.6%, highlighting a rally from the impact of the pandemic the year before, reports the New Zealand Herald.

The boost to economic activity this quarter stemmed from an easing of Covid curbs, Stats NZ added.

This was in contrast with Q3 2021, which featured the alert level 4 lockdown across the country in the second half of the quarter.

Leading the increase in Q4 GDP was the service industries, fuelled by business services and retail trade, accommodation, and restaurants. A larger rebound was expected by economists, who forecast a 3.5% rise for the quarter.

However, all forecasts surpassed the Reserve Bank of New Zealand’s prediction, which had projected 2.3% growth for Q4.

The resilience shown by the country’s economy during the Covid crisis was notable, yet the latest GDP data wasn't "the sort of dramatic overperformance we've become used to, and hints at broader headwinds set to deepen", according to ASB senior economist, Nathaniel Keall.

"While its pleasing to know that the economy retains its ability to pull off rapid turnarounds, today's figures are already dated in light of subsequent events.

"More timely indicators suggest that the outbreak of Omicron in the community during March has reduced mobility and crimped a fair degree of household spending.

"The upshot is that growth is likely to have moderated, or perhaps even dipped slightly, during the current quarter,” he added.

ANZ senior economist Miles Workman described the data as "mixed but robust. Even looking beyond the near-term wobbles associated with the Omicron outbreak, a rather potent combo of high inflation and rising interest rates [to hopefully contain inflation] is set to erode household incomes from both ends.

"To prevent a hard landing, a lot depends on the revival of international tourism and education, and the labour market holding it together,” he stated.