CANBERRA — Strong growth of the Chinese economy, coupled with the Reserve Bank of Australia's (RBA) decision to cut interest rates to record lows, are expected to deliver a AU$165 billion ($125 billion) boost to the Australian economy, according to Deloitte Access Economics.

Recently, China reported an annual growth rate of 6.9 percent for the first quarter of 2017 - ahead of estimates which predicted a growth rate of 6.5 percent growth rate.

According to Chris Richardson of Deloitte Access Economics, the RBA had underestimated China's influence on the Australian economy, and both the positive impact of the China-Australia Free Trade Agreement (ChAFTA) and lower cash rate were now benefiting Australia's bottom line.

"It's a beautiful backdrop for the economy, which is getting not just the benefit of China but the benefit of last year's interest rate cuts," Richardson told News Corp on Tuesday.

"(But) it gets muted by the time you get to the budget as the good news in profits doesn't translate neatly to company taxes."

As a result, Deloitte has predicted that Australia's 'national income' will benefit to the tune of AU$100 billion ($75.6 billion) in 2016-17 and a further AU$65 billion ($49.1 billion) in the following financial year - something Richardson said would be the biggest increase since the Australian mining boom was in full effect.