FX.co ★ Australia Leading Index Inches Higher

The Westpac–Melbourne Institute Leading Economic Index for Australia increased slightly by 0.1% month-over-month in October 2025 following a stagnant result in the prior month. Additionally, the six-month annualized growth rate exhibited an enhancement, climbing to 0.35% from 0.1%. After remaining largely stable over the previous six months, the index is beginning to demonstrate modest positive momentum as we approach the year's end. The October update suggests growth may be slightly above trend in early 2026. While the signal is subtle, it is consistent with predictions that economic activity will continue to strengthen throughout the remainder of 2025 and into the following year. According to Westpac economist Ryan Wells, GDP growth is projected to increase from the current 1.8% to 2.4% in 2026. Regarding interest rates, Westpac anticipates that the Reserve Bank of Australia (RBA) will maintain the cash rate at its present level until mid-2026. By this time, declining inflation should be more evident, allowing the possibility for rate reductions in May and August, thereby returning monetary policy to a more neutral stance.