A construction site is reflected on a building in Sydney. Australia's economy grew faster than expected last quarter as a revival in household consumption and business investment out-muscled global weakness. (Daniel Munoz/Reuters)

Australia's economy gathered pace in the first half of this calendar year, firming expectations that the nation will remain among the few developed countries to avoid recession, according to figures released Wednesday.

The economy expanded 0.6 per cent in the three months through June from the preceding quarter, the Australian Bureau of Statistics said. The market had expected only 0.2 per cent growth.

Growth for the year through June was also 0.6 per cent.

Treasurer Wayne Swan said Australia's economy had grown faster than that of any other advanced country in the past year.

"This is a remarkable result given how fragile the global economy is," Swan told reporters.

Strong spending

The growth reflected strong consumer spending due to billions of dollars in government handouts since late 2008, he said, pointing to Treasury estimates that without the stimulus packages, the economy would have shrunk 0.3 per cent in the June quarter and by 1.3 per cent in the year through June.

Prime Minister Kevin Rudd warned that the international downturn would continue to have an impact on Australia.

"The global economy is not out of the woods yet by a long stretch, and this economy, Australia's, is an integral part of the global economy," Rudd said.

Australia's economy defied expectations of a recession — defined as consecutive quarters of contraction — by eking out growth of 0.4 per cent in the first three months of 2009.

The sluggish economy had shrunk by 0.6 per cent in the last quarter of 2008 and had been expected to further weaken. The ABS on Wednesday revised down its earlier figure of 0.5 per cent for that December.