Australia's economy grew 0.7 percent in the three months to December, figures showed Wednesday, despite widespread flooding that hit the country's northeast at the end of the year.
The Australian Bureau of Statistics (ABS) said the figure was up from a revised 0.1 percent in the September quarter, which was the lowest since the depths of the financial crisis.
"While the floods have had some effect on the December quarter estimates, it is expected that the more significant economic impact of this... will be reflected in the estimates for the March quarter 2011," a statement said.
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Annual growth remained at 2.7 percent. The ABS said the biggest contributor was private spending on machinery and equipment, and inventories.
Treasurer Wayne Swan has warned floods that swamped northeastern mining, farming and tourism areas for several weeks from late December, followed by a huge cyclone in February, will force growth into reverse in the March quarter.
The treasurer said household consumption rose by only 0.4 per cent which was "well down on historical trend growth rates".
Household savings remained at 9.7 per cent.
Mr Swan said that that suggested families were taking advantage of rising incomes to strengthen their own balance sheets.
"Consumers appear to have become more cautious in the past couple of years with the saving rate rising considerably and credit growth slowing," he said.
"Although this means consumption may be weaker for a period, stronger household balance sheets will ultimately improve the resilience of the Australian economy and support future spending."
