Australia’s resource-driven economy grew twice as fast as expected in the opening quarter, propelled by increased household and construction spending and a rise in government defence expenditure.

The seasonally adjusted 0.6 per cent quarter-on-quarter increase in gross domestic product for the three months to March 31 lifted the annual rate of growth to 3.6 per cent and comes as Australia’s central bank grapples with inflation that has reached its highest level since the early 1990s. The economy grew 3.6 per cent year-on-year.