Australia's economy has defied the naysayers to record its strongest 12 months of growth since before the global financial crisis but the result could push back further interest rate cuts.
Economists had expected a lacklustre start for the economy in 2012 - AAP's survey of economists on Friday revealed a median forecast of 0.6 per cent growth in the three months to March.
However, official figures released on Wednesday showed gross domestic product (GDP) grew by 1.3 per cent in the quarter, more than double the rate forecast.
In the 12 months to March GDP grew by 4.3 per cent, the strongest annualised growth since the year to September 2007.
JP Morgan chief economist Stephen Walters said the figures meant the Reserve Bank of Australia would be less likely to cut interest rates again in the next few months.
However, he said the uncertain global economic outlook meant the RBA would probably cut another 50 basis points before the end of the year.
"Things are still looking pretty awful in Europe, and China's growth is slowing and admittedly these (GDP) figures are a few months old," he said.
CMC chief market strategist Michael McCarthy said the GDP data had caught economists and traders by surprise, causing the local share market to spike and sending the Australian dollar higher.
"This one's blown most people out of the water," he said.
Commsec economist Savanth Sebastian said strong mining investment and an unexpected rise in household spending had fuelled the GDP result.
He said the rise in spending indicated consumers were not as cautious as other data, such as retail sales, suggested.
"It suggests that consumers are spending to a degree, although not on the traditional goods and services," he said.
He said the data would help lift the economy over the next few months.
"This probably came at the right time, given that we've just had a rate cut," he said.
However, AMP chief economist Shane Oliver said the strong GDP growth was unlikely to continue, with more recent data showing weakness in the housing, retail, manufacturing and services sectors while consumer spending was also likely to fall in subsequent quarters.
"Our assessment is that it would be very dangerous to assume that this sort of growth will continue."
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