The Australian economy is recovering at a faster pace than expected, according to the results of the latest Westpac-Melbourne Institute index.
The index hit 5.8 percent in September, well above its long-term trend of 3.1 percent. The index has now accelerated from minus 5.4 percent in May, marking the fastest turnaround since the mid-1970s.
“This read represents an extraordinary pace of recovery,” Westpac chief economist Bill Evans said on Wednesday. “The sharp recovery in the leading index’s growth rate supports our view that the Australian economy is moving into a stronger growth trajectory in 2010.”
Evans now expects the RBA to raise the cash rate again at its December 1 meeting.