Vic economy to grow at 3pct: Pallas

Economic growth in Victoria is expected to ramp up to three per cent this year, state Treasurer Tim Pallas says.

"Having predicted last year growth of 2.5 per cent, we are now expecting growth to increase to three per cent both this year and next," he said.

The state government on Thursday was updating the growth forecasts contained in the May budget.

The treasurer said business confidence had been positive over the past 15 months and building approvals were up by 28.5 per cent.

Consumer confidence was also the highest in the nation, Mr Pallas said.