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18.02.202601:28:36UTC+00Australia Leading Index Muted

The Westpac–Melbourne Institute Leading Economic Index slipped 0.1% month-on-month in January 2026, reversing a 0.1% increase in December. More significantly, the six-month annualised growth rate slowed sharply to 0.02% from 0.44%, signalling that the slightly above-trend momentum seen in the second half of 2025 has largely dissipated in early 2026. Even with this softer signal, Westpac still projects GDP growth of 2.5% for 2026, close to its estimate of trend growth and broadly in line with the index’s latest reading, which points to stable rather than accelerating activity. On monetary policy, while an additional cash rate increase in the near term cannot be ruled out, the board is more likely to proceed cautiously and await further data before tightening again. The central bank’s next policy meeting is scheduled for March 16–17.

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