Aussie economy roars away like a beefed-up V8

Australia's economy accelerated in the final three months of 2009 as governments and households increased spending.

Gross domestic product, the broadest measure of the country's economic activity, rose 0.9 per cent in the final three months of the year.

The increase follows a series of strong economic data, including rising retail sales and a swelling labour market, and will add to pressure on the Reserve Bank of Australia to follow up on Tuesday's rise in official interest rates with further increases.

The GDP increase was in line with predictions, with the pace quickening from the revised 0.3 per cent rise in the September quarter.

From a year earlier, the economy grew at a 2.7 per cent clip, the fastest pace since the March quarter of 2008.

All the major sectors of the domestic economy added to growth for the quarter. A growth in government expenditure added the equivalent of 0.2 percentage points to the 0.9 per cent quarterly GDP increase.

Households added more to the economy's spurt, contributing 0.4 percentage points to the quarterly rise. Purchases of cars – up 6.8 per cent – and rents and other dwelling services contributed the most.