Australian economy tipped to slow further next year

Australia's economy has been tipped to slow further than the official estimates next year, latest Westpac/Melbourne Institute Leading Index shows.

Australia's economy is undergoing one of its most significant diversifications in recent times, leading away from mining-led growth into a diversified services, agriculture, innovation and technology focus to capitalize on the emerging Asian middle class.

However, the transition has been slower than expected despite Australia's government recently signing significant trade agreements with China, Japan and South Korea.

The Westpac/Melbourne Institute Leading Index, which projects the likely pace of Australia's economic growth in the next three to nine months, fell 0.08 points to - 0.21 percent in November,

This is the fifth consecutive month the index has remained below zero, Westpac chief economist Bill Evans said in a statement Wednesday.

"That is indicating that growth in the Australian economy in the first half of 2016 will be below trend," Evans said.

Westpac itself forecasted Australia's GDP to grow by 2.8 percent in 2015/16 while Australia's central bank expects between 2.0 and 3.0 percent growth with Australia's Treasury assessing trend growth to be 2.75 percent.

"The signal from the Leading Index indicates that our forecast may be somewhat optimistic," Evans said, suggesting the index is slightly more downbeat on growth in the first half of 2016, warranting further scrutiny.

Australia's economy has been growing below trend for some time after being severely hit from slumping commodity exports and waning mining investment as the "mining boom" ended. Endit