In his latest financial stability report, Reserve Bank of New Zealand governor Alan Bollard said the global economic recovery had become broader, and strong growth in Asia supported commodity producers like New Zealand.
However, global wholesale funding markets remain fragile, given stretched fiscal positions and banking sector problems in some European countries, Bollard said.
Efforts by households and businesses to cut or contain debt were reducing New Zealand's overall external imbalance, but were also weakening domestic demand.
Bollard said the devastating February earthquake in Christchurch had caused financial stress for households and businesses and created a challenge for the insurance sector in dealing with claim flows.
But the readiness of banks to support the recovery of New Zealand's second largest city was encouraging, he said.
"Rebuilding will add momentum to the economy and is likely to require access to credit, despite much of the damage being substantially insured."
Rebuilding costs following the 6.3 earthquake and an earlier 7.0 quake last September, which caused extensive damage, have been estimated to reach NZ$15 billion ($11.9 billion) and account for 7.5 percent of gross domestic product.
Following the earthquakes, the Reserve Bank has assumed the role of insurance sector regulator and was monitoring it closely.
"While there remains considerable uncertainty over the extent of total final claims, we believe the overall industry is sound," bank deputy governor Grant Spencer said.