Australia’s leading index rebounded in July signaling positive growth outlook, data from Westpac showed Wednesday.
The Westpac-Melbourne Institute leading index, which indicates the likely pace of economic activity relative to trend over the next nine months, rose to +0.55 percent in July from -0.06 percent in June.
Westpac expects growth over the remainder of 2018 and into 2019 to hold slightly below trend particularly in light of an uncertain outlook for the consumer.
However, falling property prices amid a slowdown in jobs growth, fading jobs confidence and high household debt are likely to create headwinds for growth, Bill Evans, chief economist at Westpac, said.
An obvious headwind to the Bank’s plan to move inflation back into the target zone is the impact that five years of underperformance in inflation will have on households’ and firms’ expectations, Evans noted.