Analysts are predicting that the economy would modestly grow in the second half of 2010 following the decline of a leading index, which predicts the possible pace of economic activity from three to nine months ahead.

According to the Westpac-Melbourne Institute leading index of economic activity report released on Wednesday, the numbers were steady in April at 264.4 points but the annualised growth rate went down to 7.5 percent, coming from the 8.8 percent posted in March.

The report said that growth rate was still way beyond its long term trend of three percent and the case was also seen in the annualised growth rate of Coincident Index, achieving 3.9 percent and still above its long term trend of 3.2 percent.

Westpac senior economist Matthew Hassan observed that this was the first incidence of slow down after some ten months of encouraging acceleration as he stressed that "the year to March saw the sharpest upturn in the Leading Index since the rebound coming out of the early eighties recession."

In spite of the Index consistently pointing to robust growth, Mr Hassan said that economic moderation in April has been predetermined by the steep sell-off in global financial markets through May-June.

He noted that the declines were influenced by the European sovereign debt crisis which resulted to large sharemarket losses in May and June.

Mr Hassan is predicting that further slow downs in the growth rate of the Leading Index should be seen in May-June, owing to the sharp turnaround in commodity prices and fall in equities.