ANZ is tipping the Reserve Bank will cut its cash rate twice in the first six months of 2015, even after a surprise drop in the jobless rate.
The big bank's forecast is a reversal of its previous prediction of rate hikes in November and December this year.
"Weaker growth and lower inflation in 2015 will provide the RBA with a reason and the scope to take the cash rate down 50bp to 2.00 per cent over the first half of the year," ANZ chief economist Warren Hogan said on Thursday.
The case for rate cuts has been building in the past two months, he said, largely because of weaker-than-expected economic growth during the September quarter and ongoing softness in most non-mining sectors.
Mr Hogan also said a soft labour market was hurting consumer and business confidence, even though new figures for December showed a surprise number of new full time jobs, and a drop in unemployment to 6.1 per cent.
If the unemployment rate remains below 6.3 per cent in January, the RBA may delay its first rate cut, Mr Hogan said after the release of the latest jobs numbers.
"This would then rule out a March rate cut and push back the timing of the first move to May," he said.
ANZ also expects the Australian dollar to continue its slide, tipping the currency will drop to 74 US cents by the end of 2015.
ANZ's latest forecast follows the Commonwealth Bank's revision a week ago, when it pushed its expectations for a rate hike out to early 2016, from its earlier prediction of late 2015.
Westpac and NAB have forecast two rate cuts in 2015.
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