The Australian economy grew by 0.6 per cent through the December quarter, suggesting the worst of the economic slowdown has now passed.
Figures from the Australian Bureau of Statistics showed the economy grew by an annualised growth rate of 3.1 per cent - just short of what is considered trend.
Analysts had been forecasting a quarterly result of between 0.3 per cent and 0.8 per cent and an annual rate of between 2.6 per cent and 3.3 per cent.
The drivers of growth were the household sector, mining, private home construction and the public sector.
Inventories, non-dwelling construction and imports all detracted from growth.
The figures showed measures of productivity again improved as employers kept a lid on costs and staffing numbers.
The quarter covers the final three months of the year during which the Reserve Bank cut official interest rates by a combined half percentage point.
It also covers a period when the global economy, particularly in Europe, suffered a slowdown that resulted in negative growth in countries such as Germany and Britain.
The household saving ratio remained steady at the 10.1 per cent mark.
However, profit share for the corporate sector continued to fall in an indication of the impact of the strong dollar. It is now back to its lowest level since mid-2007.
WA's gross State product grew another 0.5 per cent to be 14.2 per cent higher through the year.
The Northern Territory remains the national standout with state product up by 9.7 per cent through the December quarter to be 32.8 per cent higher through the year.
Victoria's woes were highlighted however by the figures with State product contracting another 1.1 per cent in the quarter to be 0.1 per cent lower through 2012. Victoria appears to be in its own recession.
It follows better economic data this week covering the period since the start of the new year.
That has included signs of a pick-up in job advertisements, retail sales, iron ore exports and new car sales.Share markets have also rallied this year with the Dow Jones hitting an all-time high over night.
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