The Australian economy is growing at its fastest rate in six years, recording a result in the year to June that was significantly higher than market expectations.

The economy grew 3.4% over the 12 months in seasonally-adjusted terms, including 0.9% in the June Quarter. Economists had forecast an annual rise of 2.9%.

Treasurer Josh Frydenberg says the rate of growth is the strongest since September 2012 at the height of the mining boom.

“The economy is strong, the fundamentals are good, momentum has continued and these are an encouraging set of numbers,” he says. “What we are seeing with employment across the economy is real confidence in a vast range of sectors.”

Household expenditure rebounded, rising 0.7% in the June Quarter to become a key growth driver. “Growth in domestic demand accounts for over half the growth in GDP and reflected strength in household expenditure,” says ABS chief economist Bruce Hockman.

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