The country’s economic growth is significantly higher than previously anticipated, according to the Westpac-Melbourne Institute Leading Index.


The Index, which tracks the likely pace of economic activity over the coming three to nine months, was 4.1 per cent in September, up from its long term trend of 2.8 per cent.


"This is the second consecutive month that growth in the Index has been above trend with August and September the only months since August last year that above trend growth rates have been recorded,” Westpac’s Chief Economist Bill Evans said.


But Mr Evans expressed his bank’s reservations at growth prospects, saying that overall growth rate is still slightly below trend.


“Westpac is a little less optimistic than the Index at this stage with our expectation that growth in the second half of 2012 will be around 2.5%,” Mr Evans said.


Mr Evans said he predicts the Reserve Bank to continue to cut the interest rate to stimulated growth in the non-mining sectors, as the sector continue to boom and mining investment surges in 2014.