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Australia’s economy bounced back to growth in the fourth quarter fuelled by a jump in corporate profits linked to rising commodity prices and a surge in exports.

The strong performance means Australia avoided suffering its first recession in a quarter of a century following a surprise contraction in the third quarter. It is now on course to surpass the Netherlands’ modern era record of 26 years of consecutive growth between 1982 and 2008.

Figures published on Wednesday showed quarter-on quarter gross domestic product grew by 1.1 per cent in the three months to the end of December, above consensus estimates. This is on par with the strongest rates of quarterly growth over the past five years and matching the advance of the March quarter in 2016.

On an annual basis GDP grew 2.4 per cent, which is below long term trends for one of the developed world’s best performing economies. However, this was still better than the 2 per cent rate expected by economists surveyed by Bloomberg.

The Australian dollar spiked as much as 0.1 per cent immediately following the release by the Australia Bureau of Statistics, but quickly pulled back to be 0.1 per cent lower at $0.7652.

Australia’s economy has performed better than many commentators expected over recent years following the end of a mining investment boom and a five-year downturn in commodity prices. But a surprise contraction in the third quarter last year had raised fears it could experience a technical recession, defined as two negative quarters of growth.

Economists say a surge in commodity prices over the past six to nine months is feeding through to the economy. Australia’s terms of trade, a measure of the relative value of exports compared with imports, improved 9.1 per cent in the fourth quarter. On an annual basis the terms of trade have risen 15.6 per cent driven by sharp increases in the price of iron ore and coal.

Wednesday’s data shows household consumption contributed 0.5 percentage points to GDP growth. Net exports contributed 0.2 percentage points. Public and private capital formation both contributed 0.3 percentage points in the quarter, a reverse from the previous quarter when both detracted from GDP growth last quarter.

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