The Treasury says New Zealand's economy will pick up throughout the rest of the year despite the devastating earthquakes in Canterbury.
In its monthly report on economic indicators, the Treasury says the economy is likely to have grown modestly in the first three months of this year, and there are signs of further improvement.
Disruption to industries including construction and tourism has mostly been confined to the quake-hit Canterbury region.
The Treasury says the economy would have grown 0.3% in the first quarter - a figure in line with economists' forecasts of 0.4%.
Lower interest rates and income gains from the rising terms of trade are beginning to provide meaningful support to the level of activity for the June quarter.
It says the current level of business optimism is consistent with accelerating growth over the year ahead, and that's also supported by encouraging signs in the housing market, and modest growth in retail spending.
But the Treasury warns that realising that growth will depend on how the global recovery develops, and how events unfold in Greece.
