Q2 GDP up 0.9 qq vs 0.5 Reuters poll
Growth boosted by services sector, manufacturing rebound
Strongerthanexpected growth may worry central bank

WELLINGTON, Sept 21 Reuters New Zealand39;s economy grew more than expected in the second quarter underpinned by a pickup in the services sector, and dodged a technical recession, which will help the government, under fire for its handling of the economy ahead of an election.

The strongerthanexpected expansion may worry the central bank, which has said it needs slower growth to dampen inflation, and could lead to rates being held at their highest in more than 14 years for longer than anticipated, economists said.

Official data out on Thursday showed gross domestic product GDP rose 0.9 in the June quarter, higher than analysts39; forecasts of 0.5, and followed a revised 0.0 in the first quarter.

Flat growth in the first quarter means the country was never technically in recession.

Annual growth increased to 1.8, Statistics New Zealand data showed, above expectations of 1.2.

The New Zealand dollar hit an intraday high of 0.5952 following the data but as of 0105 GMT was down 0.3 to 0.5913 due to U.S. dollar strength. Twoyear swap rates jumped 12 basis points to 5.745, the highest since 2008, but this was likely in part due to the U.S. Federal Reserve stiffening its hawkish stance.

Statistics New Zealand said growth in business services was particularly strong largely due to growth in computer system design, while the…