New Zealand's economy was recovering before conflict broke out in Iran, Infometrics says.

New Zealand's economy was recovering before conflict broke out in Iran, Infometrics says, although it was relying too heavily on growth in the public sector.

But it now faces disruptions for the next two years.

The economics consultancy has released its latest update on regional economies.

Provisional estimates from the Infometrics Quarterly Economic Monitor suggest economic activity rose 0.7 percent in the March quarter, and 0.4 percent over the year.