The New Zealand economy is expected to grow strongly in the next two years, despite the country's currency remaining stubbornly high, according to a report from a leading economic think-tank Monday.

Economic growth would pick up from 2.8 percent in the March 2014 year to 3.1 percent the following year, according to the Consensus Forecasts, an average of economic forecasts from financial and economic agencies, compiled by the New Zealand Institute of Economic Research (NZIER).

Exports this year were depressed by a drought during the last southern summer, but would grow strongly by an average of 3.2 percent a year in the next three years, said the report.

The New Zealand dollar would gradually ease from current highs, "but the level will remain high compared to history," it said.

The labor market would improve, with more jobs, unemployment easing from the current 6.3 percent to about 5 percent, and wages rising by an average 3 percent over the next three years.

Inflation would pick up towards 2.5 percent over the next few years, and interest rates would gradually increase from early 2014.

The rebuild of the earthquake-battered Canterbury region would be a key economic driver, but recovery was also broadening across other investment, exports and household spending.

The government operating balance would be in deficit in 2014, but in surplus in 2015 and would continue improving thereafter.