(Adds details, economists' comments and context)
By Rebecca Howard
WELLINGTON, Dec 17 (Reuters) - New Zealand's economy grew slightly faster than expected in the third quarter, thanks in part to a tourism boom, adding to a growing conviction that the central bank will stay sidelined for much of next year as it gauges the impact of its rate cuts.
Gross domestic product rose a seasonally adjusted 0.9 percent in the third quarter, below economists' forecast of a gain of 0.8 percent. Growth was 2.3 percent on the year, in line with economists' expectations.
"The services industries were fuelled by greater domestic demand and spending by international visitors," said Statistics New Zealand's national accounts manager Gary Dunnet.
Many economists say the improved growth rate provides the Reserve Bank of New Zealand some breathing space and further reduces the already-low chance of another cut in interest rates.
First NZ Capital Economist Chris Green said the slightly stronger tone to the GDP data "is likely to increase the RBNZ's comfort in keeping interest rates unchanged at 2.5 percent over the whole of 2016."
However, the possibility of another rate cut cannot be ruled out given the low inflation, he said.
Last week the central bank cut its benchmark interest rate to match a record low of 2.50 percent and virtually shut the door on further easing, saying it expected to achieve its inflation target without more monetary stimulus.
New Zealand's economy slowed in the first half largely due to falling dairy prices and a slowdown in China, one of its main trading partners, which prompted the nation's central bank to cut rates by 100 basis points between June and December.
Third quarter growth was led by manufacturing, which grew 2.8 percent in the quarter. Higher visitor numbers also boosted tourism exports and retail, trade and accommodation services. Growth in the overall services sector, which makes up 70 percent of the economy, rose 0.9 per cent.
Softer construction growth took some of the shine off GDP, falling 2.9 percent in the quarter.
The "economy is on a stronger growth trajectory and we have some optimism looking into 2016," said ANZ Senior Economist Mark Smith.
Still, while the data is consistent with a "period of stability" in interest rates the very low inflation backdrop means more rate cuts are still possible.
Downside risks included the impact of a likely dry summer on agricultural and food manufacturing and the recent weakening in housing market activity.