National accounts figures out on Wednesday show the Victorian economy grew by 1.8 per cent in the June quarter and 4.9 per cent in the year to June 2008.
This is despite recent job cuts in the manufacturing industry and uncertainty about the slowing national economy.
Nationally the economy grew by 4.3 per cent for the year and .9 per cent for the quarter, according to Domestic Final Demand figures released by the Australian Bureau of Statistics on Wednesday.
The national GDP, which takes into account factors including net international trade, grew by 2.7 per cent.
The Northern Territory recorded the strongest growth over the last 12 months, with 7.9 per cent, followed by Tasmania and Western Australia at 7.2 per cent.
The ACT went backwards, with growth for the year falling by .3 per cent.
Victorian Treasurer John Lenders credited strong growth in business, housing and public investments for the positive result.
"Victoria has doubled Australia's final demand growth rate with a healthy 1.8 per cent just over the last quarter showing our economy is punching above its weight," he said.
"Despite the challenges in the global economy we are continuing to have a strongly growing economy with solid job prospects for Victorians."
