The strength of Australia's mining sector helped it to avoid recession
Australia's economy grew strongly in the final three months of 2009, capping a year in which it was the only major economy to avoid recession.
The nation grew 0.9% from the July-to-October quarter, its biggest expansion since March 2008, the government's statistics bureau said.
Australia's growth was "the envy of the developed world," Treasurer Wayne Swan said.
For the whole of 2009, Australia's economy expanded 2.7%.
By contrast, the economies of the UK, Germany and Japan shrank 5% in 2009, and the US contracted by 2.4%.
In the fourth quarter of 2009, Australia said machinery and equipment spending surged almost 11% from the previous three months.
It avoided the worst of the slump due to huge government spending and massive Chinese demand for its commodities.
Since the end of 2008, the government has introduced a number of multi-billion dollar stimulus packages, including increased infrastructure spending and cash handouts to most Australians to lift consumer spending.
Australia's economy only contracted in the final three months of 2008.
It therefore avoided recession, which is generally defined as two consecutive quarters of negative growth.
This week, the central bank has raised interest rates, for the fourth time since October, to 4% from 3.75% to cool its growing economy.
Australia was also the first developed nation to raise interest rates - from 50-year lows - as the economic crisis eased.