Australia’s economy expanded faster than expected in the December quarter of 2025, with new figures from the Australian Bureau of Statistics (ABS) showing GDP grew 0.8% for the quarter and 2.6% over the year.

The result represents the fastest annual growth rate in almost three years and exceeded economists’ expectations of around 0.6% quarterly growth.

ABS head of National Accounts Grace Kim said economic growth during the quarter was broad-based, with activity increasing across most sectors of the economy.

“There was broad based economic growth in the quarter, with rises observed in a large majority of industries,” Kim said.

“GDP per capita increased for the fourth consecutive quarter and is now 0.9% higher than a year ago.”

Public and private demand each contributed 0.3 percentage points to the quarterly growth.

Household spending grew 0.3% during the quarter and 2.4% over the year. Discretionary spending rose 0.4%, boosted by expanded Black Friday sales and strong attendance at sporting and entertainment events.

Government spending also remained strong. State and local government expenditure increased 1% during the quarter, driven by electricity rebates and higher spending across health, education and policing.

Business investment remained a key contributor to economic activity, rising 0.7% for the fifth consecutive quarterly increase.

The ABS said investment in data centres and aircraft remained at elevated levels despite a pullback in machinery and equipment investment after strong growth in the previous quarter.

Mining and agriculture were among the strongest performing sectors. Mining output rose 2.6% as operations resumed following scheduled maintenance in the prior quarter, while agricultural production increased 2.5% on the back of favourable growing conditions and strong global demand for Australian meat.

Corporate profitability also improved, with profits across all corporations increasing 2.2% during the quarter – the strongest rise since early 2023. Mining profits surged 5.7% as higher production coincided with stronger export prices for mineral ores.

Household finances also strengthened, with the household saving ratio rising to 6.9%, the highest level since late 2022.