While agricultural production drove activity in the period, it was still below economists' forecasts for GDP growth of 0.5% and the 0.6% rate the Reserve Bank expected.
On an annual basis, GDP grew 2.4%, just below the 2.5% forecast in a Reuters poll, and down from a 2.7% annual pace in March.
"Despite falling milk prices, we're seeing growth in dairy production," national accounts manager Gary Dunnet said in a statement.
"But over the year, agriculture is up only a little, due to dry conditions last summer."
The NZ dollar fell as low as 63.31 US cents after the figures were released from 63.71 cents immediately before. The trade-weighted index fell to 68.43 from 68.79.
Local businesses have become more pessimistic about the country's economy since tumbling global dairy prices through much of this year prompted dairy exporter Fonterra to slash its forecast payout to farmers, draining the prospective income for NZ’s farming sector.
The decline in the nation's terms of trade also spurred the Reserve Bank to start cutting interest rates and governor Graeme Wheeler last week warned more easing was likely, depending on the flow of data.
Today's figures show agricultural production grew 3% in the quarter, snapping two quarterly contractions, on increased dairy production and a pick-up in beef and lamb farming.
The mining sector expanded 2.5%, turning around two quarterly contractions, with a new oil well and the reopening of another offset declines in coal mining and oil exploration.
Primary industries grew 2.8% in the year, from a contraction of 1.8% three months earlier.
Growth in the primary sector helped offset a 1.8% contraction in transport, postal and warehousing activity, which registered its biggest quarterly decline since March 2009, because of largely lower road transport activity and support services.
Among other sectors to contract was a 1.1% decline in wholesale trade and a 0.1% dip in retail trade and accommodation, a 0.4% fall in public administration and safety and a 1.7% drop in arts, recreation and other services.
Local businesses have become more pessimistic about the country's economy since tumbling global dairy prices through much of this year prompted dairy exporter Fonterra to slash its forecast payout to farmers, draining the prospective income for NZ’s farming sector.
Manufacturing shrank 0.4% in the quarter, the second quarterly contraction, with food production the only component to grow in the period, because of the pick-up in agricultural activity.
Construction grew 0.8%, adding to the 2.2% expansion three months earlier. Information, media and telecommunications activity expanded 2.5%, turning from a 2.8% contraction in the March period.
The expenditure measure of GDP grew 0.2% in the quarter for a 2.7% annual expansion.
Household spending grew 0.9% in the quarter, led by expenditure on service, while business investment expanded 2.2% on purchases of plant, machinery and equipment, and a pick-up in non-residential and infrastructure construction.
A decline in exports and increase in imports dragged down the expenditure measure in the quarter.
Real gross national disposable income per capita, which measures the purchasing power of households, grew 0.4% in the quarter for an annual increase of 0.2%.
