(Bloomberg) -- Australia’s economy posted a smaller-than-forecast contraction last quarter, a welcome sign of resilience to coronavirus lockdowns across the heavily populated east coast.

Gross domestic product fell 1.9% in the three months through September from the prior quarter, beating expectations for a 2.7% drop, Australian Bureau of Statistics data showed Wednesday. That took the annual growth to 3.9%, stronger than the pre-pandemic pace of around 2%.

The outcome will be a boost for the Reserve Bank of Australia as it suggests a stronger starting position for the economy as it begins to recover. The bank aims to use record low interest rates at 0.1% to run the economy hot and try to return inflation to its 2-3% target. 

Fiscal policy played an important role in supporting the economy through the lockdown, with Wednesday’s report showing public demand jumping 3.6% to contribute 0.8 percentage point to GDP.

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