New Zealand’s economy has managed to exit recession after experiencing consecutive downturns over an 18-month period.

The country's gross domestic product (GDP) increased by 0.2 percent in the first quarter of the year, according to official data released on Thursday. This follows a 0.1 percent decline in the previous quarter.

Despite this slight improvement, it was primarily driven by an increase in population due to record immigration levels, rather than domestic economic strength.

Per capita GDP, however, dropped by 0.3 percent during the first quarter, marking the sixth straight quarterly decline.

“The growth numbers are hiding underlying weaknesses,” remarked Craig Renney, an economist and policy director at the New Zealand Council of Trade Unions, in a post on X.

Finance Minister Nicola Willis acknowledged that New Zealanders are still dealing with the "long-lasting effects" of high inflation and high borrowing costs.

“I understand how challenging it is for people right now, who are grappling with the persistent cost of living crisis. We have a strategy to improve the situation,” Willis mentioned, emphasizing the need for "prudent government spending" and "reduced taxes for hard-working New Zealanders."

The nation's economy has faced difficulties in gaining momentum post-COVID-19 pandemic, which severely impacted its crucial agriculture and tourism industries.

The Reserve Bank of New Zealand has raised interest rates to their highest level in 14 years to control some of the world's highest inflation rates, which has slowed down economic activity.

Last month, Prime Minister Christopher Luxon’s center-right coalition revealed a budget that proposes tax reductions amounting to $14.7 billion New Zealand dollars ($9 billion USD) over the next four years.