Australia is experiencing breakneck economic growth, far outstripping its main trading partners, figures have revealed.

Between October and December, the country's economy grew by 1.3%, almost double what economists had predicts and the biggest quarterly leap in two years.

The growth was almost four times what the US had achieved in the same period.

Underpinning the spurt was the continuing willingness of Australians to splash out on consumer goods, coupled with a hyperactive housing market boosted by government grants for new house building.

Rising commodity prices were also credited.

The news is likely to shorten the odds on the Reserve Bank of Australia raising interest rates, especially since inflation is also creeping up above the 2-3% target the RBA has set itself.

The base rate in Australia is 4.25%, a 30-year low produced by cuts totalling 2 percentage points last year as the RBA sought to head off the impact of the global economic slowdown.

On top of the world

The data was welcomed by figures including federal treasurer Peter Costello, who told reporters the growth was "just remarkable".

"I'd say the worst in the international environment is over, and Australia survived the worst," he said.

In the financial markets, the Australian dollar hit an eight-week high of 52.40 US cents.

And analysts at SG Securities said they remained "confident that Australia should remain one of the better performing industrialised economies".

In a fortuitous piece of timing, they pointed out, business investment was picking up - rising 8.3% in the three months to December - just as the global recovery appeared to be taking hold.

But SG did note that exports were beginning to wane, falling 3.2% in the fourth quarter and set to continue detracting from growth through the current year.