Economic growth tipped to slow further

The outlook for the Australian economy in early 2016 has deteriorated, the latest Westpac/Melbourne Institute Leading Index shows.

The index, which indicates the likely pace of economic activity three to nine months into the future, fell 0.08 percentage points in November, signalling weak to moderate economic activity in the coming months.

Westpac chief economist Bill Evans said it was the fifth consecutive month the index had remained stuck below zero.

The bank is forecasting 2.8 per cent economic growth for 2015/16 while the Reserve Bank expects 2.0-3.0 per cent.

"It appears that the signal from the Leading Index is slightly more downbeat on growth in the first half of next year than the Reserve Bank and Westpac," Mr Evans said.

The federal government on Tuesday cut its forecast for economic growth in 2015/16 to 2.5 per cent from 2.75 per cent.