The six-month annualised growth rate in the Westpac–Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, nudged up to +0.42% in December from +0.20% in November.

The latest update is broadly consistent with 2025’s recovery carrying into 2026. However, the momentum is still not all that convincing with the Index growth rate only modestly above trend, having stalled through the middle of last year. An outright strong growth pulse, associated with Leading Index growth rate reads of over 1%, still looks to be a long way off. Westpac expects the Australian economy to grow by 2.4% this year, a result that we would see as being roughly around trend.