Gross domestic product (GDP) rose 1.0 percent in the third quarter, compared to the previous quarter when it grew an upwardly revised 1.4 percent. Total output of A$335.8 billion ($343.10 billion) was 2.5 percent higher than the same quarter last year.

While the report underlined how much better Australia was faring than its rich-nation peers, policy makers remain very much focused on future risks from the debt crisis in Europe.

The Reserve Bank of Australia (RBA) has already cut interest rates by 50 basis points to 4.25 percent this quarter as a more benign inflation outlook at home allowed it to take insurance against a global slowdown.

"We see solid growth right through next year, which is diametrically opposite to what most of the developed world can look forward to," said Macquarie senior economist Brian Redican.

"It doesn't change the outlook for rates given the risks to global growth," he added. "Lower inflation still means the RBA can ease further if needed."

The Australian dollar firmed a quarter of a cent on the numbers as some had feared a much weaker result. 

Interbank futures remain fully priced for another quarter-point cut in February. The RBA does not have a scheduled policy meeting in January but it can hold an emergency meeting at any time should Europe really implode.

Futures imply rates could be around 3.25 percent by June next year, while overnight indexed swaps show something closer to 3.75 percent.

"It seems likely to us that by the next Board meeting, the outlook for global growth will be worse and we expect the next inflation outcome, due in late January, to be another low reading," said Rob Henderson, head of market economics at NAB.

"The directional bias for rates from here will be down for the next two or three quarters," he added. "Hence, there is scope for another cut to 4 percent at the February meeting."

Still, Wednesday's data showed Australia's good fortune in having a truly huge boom in resource investment as miners expanded output to meet demand from the industrializing masses in China and India. 

Overall, business spending added a whopping 2.1 percentage points to GDP growth in the third quarter, with engineering construction up a record 31 percent. That more than offset weakness in housing and government investment.

Household consumption grew a robust 1.2 percent in the quarter, adding 0.7 percentage points to GDP. Sales of vehicles were particularly strong as supply recovered from the Japanese tsunami, while solid spending on services from health to restaurants belied the complaints of many large retailers.

Households were also saving a high 10.1 percent of disposable incomes and wages were growing at an annual pace of 7.5 percent, suggesting there was plenty of spending power in reserve.

The biggest hit to growth came from a rundown in inventories which subtracted 0.8 percentage points from GDP. However, with sales solid analysts suspected inventories would be rebuilt this quarter and thus add to growth.