WELLINGTON, June 17 (AFP) - New Zealand's economy posted better-than-expected growth of 1.6 per cent in the first quarter of 2021, official data showed Thursday (Jun 17), with analysts saying activity was back at pre-coronavirus levels.

The expansion in January-March this year exceeded forecasts of a 0.5 per cent rise and reversed a 1.0 per cent contraction in the final quarter of 2020.

Statistics New Zealand said the figures meant the economy grew 2.4 per cent in the 12 months to the end of March, driven by spending on hospitality and big-ticket retail goods such as televisions and cars.

New Zealand has largely contained the coronavirus, with no recent community transmission and just 26 deaths in a population of five million, allowing minimal day-to-day restrictions.

While there was a brief recession in mid-2020, Kiwibank chief economist Jarrod Kerr said surging domestic activity had more than made up for declines recorded in sectors such as tourism and international education.

Kerr said a booming housing market was fuelling construction, which rose 6.6 per cent in the quarter.

"The economy has confidently returned to pre-COVID levels," he said.

"We've more than dodged a double dip recession. We've outrun it. We're spending and building our way out of the hole that COVID created."

Kerr said the strong figures meant the central bank, which has held its base rate at a record low of 0.25 per cent since March 2020, would likely look at easing monetary policy by May next year.