ACT leader David Seymour is sceptical about what one economist has described as a "positive surprise" increase in New Zealand's gross domestic product (GDP).
GDP is calculated by comparing what the Government owes with what it produces. Figures released on Thursday show it increased 1.6 percent in the first three months of this year.
Treasury had forecast a decline of 0.2 percent in May's Budget and economic commentators using more recent data had predicted a less than 1 percent rise. Internationally, the OECD average was 0.3 percent.
The rise follows a 1 percent drop in the December 2020 quarter and captures the 10 days of the Auckland level 3 lockdown in February and early March.
The rise in GDP has led Finance Minister Grant Robertson to describe the economy as "resilient" in the face of the ongoing impact of the COVID-19 pandemic.
"New Zealanders' confidence in the recovery saw a boost in retail spending on big ticket items, eating out and holiday accommodation, offsetting the COVID-related loss of overseas tourists in what is traditionally a busy time of year for the industry," he said.
"Activity in the construction sector picked up to return to near-record levels, while there were solid growth in wholesale trade, business services and manufacturing."
Robertson said the higher COVID-19 alert levels during the quarter only had a limited impact on the economy, "thanks to the Government's quick response to provide cash flow and confidence".
Dr Murat Ungor, a senior lecturer in economics at the University of Otago, said the GDP increase was a "nice positive surprise", while ASB Bank economists described the boost as "whopping", considering market expectations of a 0.5 percent lift.
ASB economists said the "massive" 6.6 percent lift in construction output in New Zealand "suggests the sector may not be as capacity-constrained as previously feared".
Building consents were at an all-time high last month. Stats NZ data showed that in March, 4128 new homes were consented - the highest number since the 1940s.
But ACT leader David Seymour says the boost is on borrowed money, describing the latest GDP update as "a dead cat bounce".
"The Reserve Bank printed $100 billion; the Government borrowed $60 billion - we've got an economy that's running on a sugar hit."
The Government is $107.5 billion in debt and figures released in the Budget showed debt is expected to increase by close to $100 billion in the next few years, peaking at 48 percent of GDP in 2023. The Government expects to get back to surplus from 2027.
"The Government has been focussed on all manner of initiatives, from bike bridges to public holidays, and paying people more to stay home, while the real need is for a serious post-COVID recovery plan," Seymour said.
"Businesses now face enormous shortages of skilled workers, energy, and supplies, which are leading to delays and price increases. These shortages are making the economy feel busy, but it is not productive to be waiting longer and paying more to do business."
National's shadow treasurer Andrew Bayly told Newshub it was "good to see the economy has returned to growth", but warned New Zealand was slipping behind Australia.
"It would be concerning if that trend continues, we don't want to see Kiwis forced to move to Australia for better pay and job opportunities."
While New Zealand's GDP climbed 1.6 percent, Australia's grew 1.8 percent, but New Zealand's grew more compared to the same time last year - 2.4 percent compared to Australia's 1.1 percent.
Unemployment is also higher in Australia at 5.1 percent compared to 4.7 percent in New Zealand. This led Prime Minister Jacinda Ardern earlier month to claim New Zealand was "outperforming Australia economically".
It's in contrast to Australian Prime Minister Scott Morrison who said on Thursday: "Australia continues to lead the world in our economic comeback from the COVID-19 pandemic."
The United Kingdom appears to be doing better with a 6.1 percent increase in GDP. Japan's rose by 1.5 percent, Canada's 0.3 percent and the United States 0.4 percent.
