Economic output from January to March also rose by 0.2% compared with the first quarter of last year, when the economy contracted by a revised 1.8%.
The island had been mired in recession since the third quarter of 2011, albeit at a shallower rate in the past year.
Private demand showed growth in the first quarter of 2015 focused on trade, the hospitality industry and professional services, the statistics department said. Manufacturing and construction saw a decline in output, it added.
Cyprus is following a three-year economic adjustment programme mandated by the EU and the IMF after it needed a €10 billion international bailout in early 2013. It is due to exit the programme in early 2016.
In its May 5 spring forecast, the European Commission said Cyprus’s economy would contract by 0.5% in 2015 before returning to growth next year with an increase in output of 1.4%.