The Westpac–Melbourne Institute Leading Economic Index for Australia edged up 0.1% month-on-month in December 2025, following a flat reading in the previous month. Meanwhile, the six-month annualized growth rate rose to 0.42% from 0.20% in November, suggesting that the economic recovery seen through 2025 is carrying into early 2026. However, the improvement remains tentative, as the index is only modestly above its long-run trend and had stalled through the middle of last year. Head of Australian Macro-Forecasting Matthew Hassan noted that a clearly strong growth pulse, typically signaled by Leading Index growth above 1%, still appears some way off. Westpac expects the Australian economy to grow 2.4% this year. On the monetary front, the central bank is widely expected to keep the cash rate unchanged at its February meeting. Still, policymakers remain alert to inflation risks and have laid the groundwork for potential rate hikes should price pressures re-emerge.