Australia’s economic growth is expected to pick up pace in the coming year, a private survey shows.

The Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months in the future, was 4.2 per cent, above its long-term trend of 2.8 per cent.

Westpac senior economist Matthew Hassan said the index points to moderately above-trend growth for the first half of 2013.

“The Leading Index continues to show a clear lift in momentum since mid 2012,” he said.

“Our chief concern though is how well this will be sustained through the year, especially as the peak in mining investment approaches.”

The Reserve Bank of Australia has said it expects the mining investment boom to peak some time in 2013.

The Coincident Index, which measures current economic activity, was 3.1 per cent in February, slightly up from 2.3 per cent in January.

The RBA board next meets on May 7 and Westpac expect it to keep the cash rate at three per cent.

However, Mr Hassan said he expects the cash rate to be reduced before the end of the year in a effort to boost sluggish growth.