Australia Leading Index Subdued

The Westpac-Melbourne Institute Leading Economic Index for Australia was flat in June 2025, following an upwardly revised 0.1% gain in May.

The six-month annualized growth rate slipped to 0.03% from 0.11%, signaling a shift to ‘around trend’ growth after a modestly above-trend start to the year.

Westpac forecasts the Australian economy to expand by just 1.7% in 2025, slightly better than the 1.3% rise in 2024 but still underwhelming. “It will mean annual growth has averaged just 1.5% since 2022, a cumulative decline in per capita terms and well below Australia’s twenty-year average of 2.0%,” said Matthew Hassan, Head of Australian Macro-Forecasting at Westpac.

On monetary policy, the bank expects the Reserve Bank of Australia to continue a gradual easing cycle, with a 25 basis point cut in November followed by two additional 25 bp reductions in the first half of 2026.