Australia Leading Index Signals Sub-par Growth
(RTTNews) - Australia's leading index remained in negative territory in January signalling that the economy will continue to see sub-par growth well into 2024, survey data from Westpac showed Wednesday.
The six-month annualized growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend over the next three to nine months, dropped to -0.25 percent in January from -0.01 percent in the previous month.
"The Australian economy remains stuck in a below trend growth rut," Westpac Senior Economist Matthew Hassan said.
After a weak 0.8 percent growth seen over the second half of 2023, Westpac expects Australia's economic growth to track a 1.3 percent annualized pace in the first half of this year.
Although momentum set to remain subdued, the growth pulse improved on a year ago, Hassan added.
"…the detail continues to suggest that this improvement is still, at best, a tentative stabilisation rather than the beginning of a move into a new cyclical upswing," said Hassan.
The economist expects the Reserve Bank to hold the rate at the March meeting.
"However, it's likely to be some time yet before the Board adopts a more firmly 'on hold' position, and longer still before it may start to see the need and scope for interest rate cuts," the economist said.
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