Australia's economy grew by 0.5% in the second quarter of the year with extra government spending offsetting a fall in net exports as the nation marked 25 years of uninterrupted economic expansion. 

The Australian Bureau of Statistics data showed annual growth at 3.3%.

This  was in line with expectations as the economy continues its shift away from an unprecedented boom in resources investment. 

A 1.1% expansion in the first quarter quarter was driven by net exports and household spending, but volatile exports - a key growth engine - were a drag for the performance from April to June. 

Over the three months, they detracted 0.2 percentage points from GDP with stronger-than-expected government spending the saviour as public investment grew by 15.5% quarter-on-quarter. 

Economists said the quarterly growth was "a good result" and should ease pressure for further interest rate cuts. 

They said that the return of the Australian economy in the second quarter to the growth rates seen before the end of the mining boom relieves some of the pressure on the RBA to cut interest rates again, at least in the next few months.

The Reserve Bank yesterday held interest rates steady at a record low of 1.5%, having cut them twice in the past four months in a bid to boost sluggish inflation as the economy transitions towards non-resources growth.