Australian economic growth to be slow in 2015: report

Australian business investment is expected be weak throughout 2015 promoting Australia's central bank to cut interest rates again, a new report revealed on Wednesday.

The Westpac/Melbourne Institute Leading Index, which indicates the likely pace of economic activity over the next three to nine months, rose by 0.30 percentage points in January.

The report predicted the economy was still "sluggish" and would grow at 2.75 percent in 2015.

"We still believe that an interest-rate cut in March is the best policy to support domestic demand and maintain downward pressure on the Australian dollar and this outcome remains our forecast," Westpac chief economist Bill Evans said in a statement.

Evans predicts that the Reserve Bank of Australia (RBA) will hold off cutting interest rates in the short-term, but needed to do so in order to boost the economy.

"A decision by the (RBA) Board to delay the next cut to April or May to assess the immediate impact of the February cut on the housing market is a reasonable prospect," he said.

"The important point, as signaled by the below trend growth in the Leading Index, is that the Australian economy needs more stimulus and the Reserve Bank, with ample scope to cut (by world rather than historical standards) should be acting accordingly." Endi