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flag Australia's economy slowed in January 2026, with growth near trend due to weaker sentiment and housing approvals, though labor market strength supports a 2.5% GDP forecast.

flag Australia’s economic momentum slowed in January 2026, with the Westpac–Melbourne Institute Leading Index dropping to a 0.02% annualized growth rate from 0.44% in December, signaling near-trend growth rather than expansion. flag The decline was driven by weaker consumer sentiment and falling housing approvals, while higher commodity prices provided partial support, though a strong Australian dollar may limit gains. flag Westpac maintains its 2026 GDP growth forecast at 2.5%, citing a resilient labor market, and expects the Reserve Bank of Australia to hold rates in March but may raise them by 25 basis points in May, depending on inflation data.

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