Australia’s leading index returned to negative zone in August after a short lived improvement, data from Westpac showed Wednesday.
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, fell to -0.35 percent in August from +0.01 percent in July.
Data showed that the major contributors to the sharp decline in the growth rate came from substantial drags from the share market, commodity prices and dwelling approvals.
Westpac expects that economic growth pace will pick up from the 2 percent annualised pace in the first half of 2019 to 2.5 percent in the second half and hold at around that 2.5 percent pace in the first half of 2020.
Bill Evans, chief economist at Westpac, said at this stage, he continues to see no reason why the central bank should delay the move with a cut in October looking to be the better option.
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