The Australian economy surged by 1.3% in the March quarter, more than double economists' expectations.
Household spending, business investment and mining construction were the main drivers, with official figures showing the economy grew by 4.3% in the 12 months to the end of March.
Exports and housing investment fell in the quarter.
Treasurer Wayne Swann says the result is the fastest growth in four years.
Western Australia's economy grew by nearly 8% in the quarter, far outpacing the rest of the nation.
Victoria, South Australia, the Northern Territory and the ACT also expanded, while there was a slowdown in New South Wales, Queensland and Tasmania.
Analysts say the result reduces the need for further cuts to the cash rate.
