Australia's economy has "turned a corner", ending a record 21 months of falling living standards in an encouraging sign that there are better times ahead.
Gross domestic product expanded by 0.6 per cent in the December quarter, the fastest quarter of growth in two years, the Australian Bureau of Statistics reported on Wednesday.
And, after seven straight quarters of population growth masking a decline in real economic output, GDP per capita - or output per person - rose by 0.1 per cent.
Treasurer Jim Chalmers said the numbers "reflect the substantial and very encouraging progress Australians are making together in our economy".
"Growth is picking up in the Australian economy, and the Australian economy has turned a corner," he said.
"Resilient and rebounding growth is particularly important in the face of heightened uncertainty at home and abroad, as we brace for Tropical Cyclone Alfred and confront rising global trade tensions.
"Today's data confirms that per capita GDP, real incomes and household consumption are now all growing again."
Over calendar 2024, the economy grew by 1.3 per cent.
That's a marked improvement from the 0.8 per cent annual pace recorded in the September quarter, which was the lowest result since the early 1990s recession, outside of the pandemic.
The quarterly figure was in line with the consensus of economists after expectations were bumped up from 0.5 per cent, following stronger-than-expected quarterly trade figures, government spending and business inventories.
But the result smashed the estimates of the Reserve Bank, which in its February Statement on Monetary Policy released two weeks ago predicted year-end growth to come in at 1.1 per cent.
Bureau head of national accounts Katherine Keenan said modest growth was seen broadly across the economy.
"Both public and private spending contributed to the growth, supported by a rise in exports of goods and services," she said
Following large rises in recent quarters, growth in government spending moderated to 0.7 per cent.
Private investment rose 0.3 per cent although investment in dwellings fell 0.4 per cent as high prices and labour shortages continued to weigh on the pipeline of work.
"This is very encouraging to see that for the first time in a while, there is a substantial contribution from the private sector," Dr Chalmers said.
But the public sector continued to be the biggest contributor to GDP growth, accounting for more than 40 per cent of the quarterly rise, AMP economist My Bui noted.
"While the growth rate is still way below the long-term trend, it marks a turning point for the economy as this is the first annual change uptick in more than two years," she said.
"The fragile picture remains though, with government contributing to most of the growth and consumer spending boosted by significant promotions."
Productivity growth - the main driver of living standards in the long term - remained a concern, with output per hour worked declining 1.2 per cent over the year.
Shadow treasurer Angus Taylor said the data confirmed "grim trends" continuing in the economy unabated.
"The only thing driving our economy right now is population growth, and people working extra hours," he said.
"Labour productivity continues to be disastrous in this country, and that means there's less money to pay for those goods and services that Australians are used to being able to buy.
"It's why they're having to work harder to make ends meet."
Economic growth is still being supported by elevated government spending, which accounted for 28.2 per cent compared to the average of 22.8 per cent in the decade pre-COVID, KPMG chief economist Brendan Rynne said.
"This level of spending is not sustainable with current tax settings and is eroding the government's underlying cash balance," he said.
