Australia has so far avoided entering recession
The Australian economy grew by more than expected in the second quarter of 2009, boosted by increases in household consumption and business investment.
The economy expanded by 0.6% in the three months to June from the previous quarter, the government said.
Analysts had forecast growth of 0.2% after a sharp drop in export prices was announced earlier in the week.
The government has announced stimulus measures of 42bn Australian dollars ($35bn; £21bn) in the past year.
Australia is one of the few developed countries to have avoided falling into a recession.
Adam Carr, chief economist at ICAP, called the results "fantastic".
"It's looking like we will be firing on all cylinders in H2 [the second half of the year] and 2010," he said.
He added that he thought the Reserve Bank would raise interest rates before the end of the the year.
On Tuesday, figures showed Australian export prices in the second quarter had fallen by 15.8% - the largest drop in the 50 years since records began.