Aaron Finch has praised Shane Watson for his "outstanding" innings in Australia's loss to South Africa in the first Twenty20 international on Wednesday.

Watson had not played an international game since April before the meeting with the Proteas, but the all-rounder was in top form with the bat on his way to a knock of 47 from 36 balls.

His contribution was not enough as Australia eventually collapsed to a seven-wicket defeat, but Finch was delighted with the performance of his teammate at the Adelaide Oval.

"For a guy coming back for the second or third hit after quite a long layoff, I thought he was outstanding," Australia's T20 skipper told reporters.. "He hit the ball in the middle of the bat, played the way we know how he can play, took the game on.

"We've seen in this format of the game, and one-day cricket and Test cricket at times, he's just so dangerous and so damaging. It was just unlucky we didn't have somebody through that middle path who could really go with him and take it to the opposition."

Australia meet South Africa in the second T20 on Friday.