Economy grows for 17th year

The seasonally adjusted growth of 0.3% in the June quarter followed growth of 0.7% in the March quarter, after a revision yesterday, and brought annual growth to 2.7%.

Despite dipping from 4.5% in September, growth continues to compare well internationally, with data compiled by CommSec putting Australia at the top of a list of 10 industrialised countries ranked by their June-quarter growth.

"Many countries around the globe are skirting a recession yet growth locally remains solidly close to long-term averages," said CommSec equities economist Savanth Sebastian.

Although most sectors continued to grow, albeit at a slower pace, there were some that went backwards.

The dip in consumer sentiment hit discretionary sectors, with retail trade dipping 0.5% compared with March, and accommodation, cafes and restaurants down 1.8%.

A large part of the 3.5% growth in the national income was buoyed by a surging terms of trade, a measure of the price paid for Australia's exports compared with imports, which rose 13.1% during the second quarter.

"This extraordinarily strong income growth provides a big buffer against the headwinds facing Australia at the moment," said ANZ senior economist Katie Dean.