Just six weeks before the Budget, the Treasury is starting to show more optimism about the economy and expects it to grow solidly this year.
In its report into economic indicators released during March, the Treasury says they all point to ongoing economic strength - even though a widespread drought will have a negative impact.
The Treasury does not put a figure on how strongly it thinks the economy will grow this year, but says it will not be as strong as the 1.5% growth recorded in the last three months of 2012.
It says there have been plenty of signs that the economy will grow solidly this year, with both business and consumer confidence up.
In another sign of strength, the Government's tax take in the eight months to the end of February is $719 million higher than forecast.
The Treasury expects, however, the drought to take 0.7% off the growth rate.
