FX.co ★ Australia Leading Index Edges Lower

The Westpac–Melbourne Institute Leading Economic Index slipped 0.1% month-on-month in September 2026, after two consecutive months of no change, marking its first decline since May. The six-month annualised growth rate was steady at -0.03%, unchanged from August. These readings indicate that economic momentum remains slightly below trend heading into late 2026 and early 2027, with growth stabilising at a modest pace rather than stalling outright. Even so, higher fuel prices and the Reserve Bank of Australia’s September rate hike are still working their way through the economy and may weigh on near-term growth. Westpac forecasts Australia’s economy will expand by 1.5% in calendar 2026, below its long-run trend rate. “For now, it suggests the economy has been stuck in a bit of a holding pattern over the last two years,” said Matthew Hassan, Westpac’s head of Australian macro forecasting.