A big fall in the Australian dollar would lift the economy into recovery mode, with mining, tourism and manufacturing likely to be among the big winners.
Weaker commodity prices and slowing Chinese demand contributed to the Australian economy growing by just 2.6 per cent in 2014, after recording average annual growth of well over three per cent for the past 50 years.
On Monday, JP Morgan economist Tom Kennedy backed a weaker dollar to put the economy on a stronger growth track, with a 10 per cent fall in the Aussie expected to lift gross domestic product by 0.6 percentage points over two years.
Mining, tourism and manufacturing would likely get the biggest boost from a continued fall in the Australian dollar, Mr Kennedy said.
He said the impact would likely be muted across other parts of the economy, like retail and services.
"We find a permanent 10 per cent decline in the real TWI (trade-weighted index) will lift GDP growth by a cumulative 0.6 percentage points over two years," Mr Kennedy said.
He said the outcome was "broadly consistent with RBA findings", suggesting that "unexpected currency depreciation has a meaningful impact on real GDP growth".
Tourism operators - hard hit by currency appreciation in 2012 and 2013 - would also gain from a lower dollar, he said.
"There already are signs a lower currency is supporting domestic tourism, with the tourism balance rebounding last year."
The forecast comes amid expectations the Reserve Bank of Australia could revise down its assumption for GDP growth in its quarterly statement on monetary policy, due out on May 8.
Mr Kennedy said the Australian dollar, as measured against a basket of currencies, had already fallen about 15 per cent over the past two years, with around half of the decline coming in the past six months.
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