SYDNEY: Australia's economic growth unexpectedly accelerated in the second quarter, driving the nation's currency higher on expectations the central bank will raise borrowing costs from a half-century low.

Gross domestic product rose 0.6 percent, the biggest gain in more than a year, from the previous three months when it grew 0.4 percent, the Bureau of Statistics said in Sydney yesterday. The median estimate of 20 economists surveyed by Bloomberg News was for a 0.2 percent expansion.

Yesterday's report confirms central bank Governor Glenn Stevens' view that the economy has been "stronger than expected" as A$20 billion ($16.6 billion) of government cash handouts boosted spending at retailers such as Woolworths Ltd and Harvey Norman Holdings Ltd. Australia joins other developed nations, including France and Germany, that are rebounding from the deepest global recession since the Great Depression.