FX.co ★ Australia Leading Index Inches Higher

The Westpac–Melbourne Institute Leading Economic Index for Australia saw a slight increase of 0.1% in December 2025, after remaining unchanged in the previous month. Additionally, the six-month annualized growth rate improved to 0.42% from 0.20% in November, indicating the continuation of the economic recovery observed in 2025 into early 2026. However, this progress is cautious, as the index is only marginally above its long-term trend and had stalled in mid-2025. Matthew Hassan, Head of Australian Macro-Forecasting, pointed out that a robust growth momentum, typically indicated by Leading Index growth surpassing 1%, is still distant. Westpac projects the Australian economy will grow by 2.4% this year. In terms of monetary policy, the central bank is generally anticipated to maintain the cash rate at its February meeting. Nonetheless, policymakers remain vigilant regarding inflation risks and have prepared for potential interest rate hikes should inflationary pressures resurface.