The economy is expected to regain momentum towards the end of 2015 but an interest rate cut is still likely.
The Westpac-Melbourne Institute's barometer of likely economic growth, three to nine months into the future, shows an above trend reading in February.
It's the first time this has occurred since January 2014, sparking hopes of a pick-up in the economy.
"It suggests the Australian economy will start to regain some momentum towards the end of this year, although it remains to be seen how well this pick-up is sustained," Westpac senior economist Matthew Hassan said.
The likely pace of economic growth lifted from -0.32 per cent in January to +0.45 per cent in February.
But Westpac is still forecasting an interest rate cut, either in April or May, as business and consumer confidence remains weak along with Australia's terms of trade, the ratio of import to export prices.
"We remain concerned about the weak pace of growth momentum," Mr Hassan said.
A fall in the Australian dollar to 76 US cents in March, for the first time in six years, is helping to shield the economy from the effects of falling commodity prices.
Low interest rates are also boosting construction activity.
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