[SYDNEY] Australia's economy grew by 0.5 per cent in the June quarter with an upswing in government spending offsetting a fall in net exports as the nation marked 25 years of uninterrupted economic expansion.
The Australian Bureau of Statistics data, which showed annual growth at 3.3 per cent, was in line with expectations as the economy continues its shift away from an unprecedented boom in resources investment.
"It's official, Australia has now achieved 25 years of uninterrupted economic expansion," said Treasurer Scott Morrison.
"But it is no time for complacency. We continue to fight for every inch of growth in a very challenging world economy."
A 1.1 per cent expansion in the January-March quarter was driven by net exports and household spending, but volatile exports - a key growth engine - were a drag for the April-June number.
Over the three months, they detracted 0.2 percentage points from GDP with stronger-than-expected government spending the saviour as public investment grew by 15.5 per cent quarter-on-quarter.
The Australian dollar, which climbed ahead of the data, fell slightly after the announcement to 76.58 US cents but soon recovered.
Capital Economics chief Australia economist Paul Dales said the quarterly growth was "a good result" and should ease pressure for further interest rate cuts.
"The return of the Australian economy in the second quarter to the growth rates seen before the end of the mining boom relieves some of the pressure on the RBA to cut interest rates again, at least in the next few months," he said.
The Reserve Bank on Tuesday held interest rates steady at a record low of 1.50 per cent, having cut them twice in the past four months in a bid to boost sluggish inflation as the economy transitions towards non-resources growth.