Australian Leading Index
Annual growth in an Australian index of leading indicators slowed in June by the most since 2000, reinforcing the central bank's assessment that the economy is cooling enough for it to cut borrowing costs.
The annualized growth rate of the leading economic index slowed to 2 percent from 2.4 percent in May, Westpac Banking Corp. and the Melbourne Institute said in Sydney today. The leading index rose 0.1 percent to 256.3 points.
Australia's central bank said yesterday it may soon cut interest rates for the first time in seven years to avoid a “deeper and more persistent'' economic slowdown. Today's report adds to signs growth is slowing in Australia's $1 trillion economy, which expanded at weakest pace in almost two years in the first quarter as consumers slashed spending.
“A significant easing in rates is now required,'' said Bill Evans, chief economist at Westpac in Sydney. “This is the slowest growth rate of the index since July 2001 and the sharpest fall in the growth rate since 2000.''
Westpac's leading index tracks eight gauges of economic growth, such as company profits and productivity, to give an indication of how the economy will perform over the next three to nine months payday loans in one hour.
Reserve Bank of Australia Governor Glenn Stevens raised the benchmark interest rate in March, adding to increases in February, November and last August that boosted the overnight cash rate target by a total of 1 percentage point.
“A case could be made for an early reduction in the cash rate,'' members of the Reserve Bank's board said in minutes of their Aug. 5 meeting, released in Sydney yesterday.
Westpac's coincident index, a measure of the current state of the economy, rose 0.1 percent in June. The annual growth rate of the coincident index slowed to 2.4 percent from 2.7 percent.
Filed under: economics by Wolf