Australia economy picks up speed in fourth quarter

Adam Jeffery | CNBC

Australia's economy grew a solid 0.8 percent last quarter as a surge in resource exports and a pick up in consumer spending helped offset a sharp pullback in business investment, an upbeat report that sent the local dollar bounding higher.

Gross domestic product (GDP) advanced at a 2.8 percent pace compared to the fourth quarter of 2012, up from 2.3 previously, and closer to the usual pace expected for a country that has not suffered a recession in 22 years.

(Read more: Australia central bank holds rates at record low)

The Australian dollar jumped a third of a U.S. cent as the data came in above of forecasts. Interbank futures were steady as the market had already widened the odds of a further easing in interest rates given more timely data showed past cuts are feeding through to housing and consumption.

Median forecasts had been for GDP growth around 0.7 percent in Q4 with a range of 0.6 percent to 1.0 percent . GDP was seen up 2.6 percent on the same quarter last year, with a range of 2.4 to 2.8 percent.

(Read more: Australian Finance Minister: 'We could do better')