Australia's economy rocketed to 4.3% growth for the year to March.
This was its fastest expansion since the global financial crisis as Chinese demand for iron ore and other commodities masked difficulties outside the mining industry.
The Australian Bureau of Statistics said today that the economy grew 1.3% in the January-March quarter from the previous quarter, which was double what economists had expected.
A major driver was a 19.7% surge in engineering construction, mainly in mining.
Planned investment in the resources sector reached $500 billion. Increased spending by households also made a significant contribution to growth. But manufacturing continued to contract as the mining boom drives up the Australian dollar, making the country's manufactured exports less competitive.
The January-March growth figures predate the latest deterioration in the European debt crisis but could still make Australia's central bank less willing to cut interest rates aggressively.
The central bank yesterday cut its benchmark rate for a second consecutive month, to 3.5%, as Europe's economy weakens and growth in China moderates.
Treasurer Wayne Swan said the strong growth was achieved despite a cyclone disrupting iron ore exports from Western Australia state and some sectors outside the mining industry struggling against a high Australian dollar.
Mineral-rich Western Australia's economy grew by 13.6% for the year.
Swan said the growth also demonstrated that the $1.5 trillion Australian economy would withstand a carbon tax which will be paid by the nation's biggest industrial polluters from next month.
The government's critics argue that the $23 tax that polluters will have to pay for every metric ton of carbon gases that they produce would cost jobs. "The fact is with a carbon price, our economy will continue to grow," Swan said.
The government forecast in May that the mining boom would lift economic growth from 3% in the current fiscal year ending June 30 to 3.25% next year. It also forecast that the carbon tax which will take effect from July 1 would dampen economic and employment growth by less than a quarter of a percentage point during the next fiscal year.
