2025.08.2701:09:45UTC+00Australia Leading Index Remains Subdued

The Westpac-Melbourne Institute Leading Economic Index for Australia experienced a modest increase of 0.1% in July 2025, marking a slight rise after remaining unchanged the previous month. Simultaneously, the six-month annualized growth rate improved to 0.12% from 0.01%, indicating subdued economic momentum anticipated for the latter half of 2025 and into early 2026. Matthew Hassan, Westpac’s Head of Australian Macro-Forecasting, remarked, "The recovery initiated last year is persisting, albeit at a sluggish pace." Westpac forecasts a GDP growth rate of 1.7% in 2025, a minor increase from 1.3% in 2024, with expectations for growth to revert to its 2.2% trend pace by the end of 2026. Hassan highlighted the potential necessity for further interest rate reductions to ensure the recovery gains strength. However, the Reserve Bank of Australia (RBA) is unlikely to act hastily, as the effects of previous rate cuts continue to penetrate the economy, and the labor market is only gradually weakening. Overall, Westpac anticipates the central bank will maintain rates in September before potentially implementing a further 25 basis point cut in November.