WE WILL avoid a recession this year but Australia still faces troubled economic waters because of "income weakness" and sluggish business confidence.
That shaky outlook is revealed in an economic and political report from the Committee of Economic Development of Australia.
CEDA's chief Stephen Martin said falling commodity prices would impact how the income weakness played out but one factor could help turn things around.
"The rising Asian middle class offers opportunities for our non-resource sectors," Professor Martin said.
"Capital expenditure in non-mining sectors will also be vital for the Australian economy this year.
Prof Martin said the looming election was unlikely to improve Australia's low business confidence.
"Low business confidence means we won't get the investment needed to drive new jobs."
The economy was entering a period unlike anything in more than 20 years and there were significant global risks for our economy.
Update your news preferences and get the latest news delivered to your inbox.