SYDNEY, Jan. 22 (Xinhua) -- A leading projection of Australia's economic activity has forecast slow but positive growth for 2025.
The Westpac Banking Corporation, one of Australia's big four banks, and the Melbourne Institute, a research department located within the Faculty of Business and Economics at the University of Melbourne, on Wednesday published an update on their insights into the country's economic momentum.
The six-month annualized 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, stayed in positive territory in December 2024, albeit easing a touch to 0.25 percent from 0.33 percent in November 2024.
Matthew Hassan, head of macro-forecasting at Westpac, said that while the growth signal is not "particularly strong," it has shown an improvement from "persistently negative, below-trend reads recorded over the previous two years."
"The latest Index growth rate points to a lift in momentum over the first half of 2025," he wrote in the bank's update.
Westpac forecasts that Australia's gross domestic product (GDP) growth will gradually improve over 2025, reaching an annual rate of 2.2 percent by December 2025 compared to 0.8 percent over the year to September 2024.
In its own projections released on Tuesday, the Commonwealth Bank of Australia (CBA), the country's biggest bank, also tipped GDP growth of 2.2 percent by the end of 2025.
Westpac said on Wednesday that it expects Australia's central bank, the Reserve Bank of Australia (RBA), to keep interest rates on hold at 4.35 percent at its next board meeting in mid-February before a cut in May.
The bank said that the RBA Board is becoming more confident about achieving a sustained return to inflation in the 2 percent to 3 percent target band. A further moderation in inflation is expected to eventually clear the way for less restrictive interest rate settings, it added.
However, the CBA expects a rate cut from the RBA in February.
The RBA has kept the key interest rate unchanged since its last rate rise in November 2023. ■
