The Minister of Finance says the recovery in the economy is still weak and could yet be derailed.
Figures show the economy's output rose for the third consecutive quarter in the final three months of last year.
Manufacturing led that recovery after five consecutive quarters of declines.
Output across the economy rose by 0.8% - its largest quarterly rise in two years.
On an annual basis, the economy contracted 1.6%.
The minister, Bill English, says the increase is encouraging but warns that the recovery still faces risks, and growth is still not strong enough to create jobs or lift incomes.
Mr English says the Budget in May will be geared to lifting investment in exports and jobs.
And Deutsche Bank chief economist Darren Gibbs says the 0.8% expansion over the quarter is only half that normally experienced when coming out of recession, indicating a tentative recovery.
Wholesale trade, and retail, accommodation and restaurants, gained strongly over the three month period.
Household spending rose nearly 1%, taking advantage of heavy discounting by retailers, while low interest rates boosted investment in housing.
A build-up in inventories also boosted production as firms confident of further growth in demand re-stocked shelves.
While investment in plant, machinery and equipment picked up in the quarter, business spending contracted.
Manufacturing output, which had fallen for seven consecutive quarters, rose by 4.5%, but is still 16.5% below its last peak in September 2005.
