(Adds economist comment, detail on dairy gains)
WELLINGTON, March 1 (Reuters) - New Zealand's terms of trade rose at the strongest rate in more than three years in the fourth quarter, the country's statistics agency announced on Wednesday, as recovering dairy prices strengthened the country's trade ledger.
Terms of trade grew 5.7 percent in the three months to December, largely through farmers' profits.
"It's really a dairy prices story," said Philip Borkin, senior economist at ANZ Bank.
Export prices rose 4.8 percent, led by dairy - the country's largest goods export earner - which rose 14 percent.
The result was largely expected by economists who had watched hopefully as dairy prices rebounded by 50 percent during 2016 due to tightened global supply after two years of declines.
Imports prices fell 0.8 percent on an increased number of cheaper electronics such as cellphones and computers entering the country.
The New Zealand dollar had a slight lift from the announcement, rising to $0.7195 from $0.7190.
Export volumes fell 5.8 percent, while import volumes rose 1.2 percent.
Economists did not expect to see the index gain dramatically in 2017.
"We believe the outlook is more one of stabilisation than further gains," Borkin said.
First quarter terms of trade will be released on June 1.
