The New Zealand economy has emerged from a deep and difficult recession, unexpectedly expanding for the first time in six quarters, according to Bloomberg reports.

The June quarter figures showed that rising consumer sentiment and spending as well as improved exports were driving the positive growth. The New Zealand dollar sprang to 73.12c against the greenback - a 13-month high. The Australian dollar was pulled along for the ride as well, hitting its own 13-month high of 87.90c this morning.

House prices in New Zealand also grew for the first time in six quarters and the median value has continued its steady rise in the months since June, according to the Real Estate Institute of New Zealand.

New Zealand's Official Cash Rate has been at a record low of 2.5% since April 2009. The market now expects Reserve Bank governor Alan Bollard to start raising rates sooner than he had previously indicated.