Australia's economy entered its 27th year without a recession thanks to bumper exports and a jump in business investment, although uncertainty over the outlook for household consumption and global trade remains a worry.
Gross domestic product (GDP) expanded by 1 percent in the first quarter, from an upwardly revised 0.5 percent in the December quarter, data from the Australian Bureau of Statistics showed on Wednesday.
Annual growth sprang ahead to 3.1 percent, from December quarter's 2.4 percent.
The result just topped market forecasts of growth of 0.9 percent for the quarter and 2.8 percent on-year, pushing the local dollar up a quarter of a cent to $0.7660.
The Reserve Bank of Australia (RBA) had sounded upbeat about future economic growth on Tuesday but kept interest rates steady at 1.5 percent in anticipation of a gradual revival in inflation.
Investors suspect policy will stay on hold for a long time to come and interbank futures are not fully priced for a hike until September 2019.