The Reserve Bank of Australia (RBA) has lowered forecasts for the country's economic growth and inflation over coming years, saying uncertainty hovers over the outlook for the economy.
The decade-long mining boom and a slowdown in China's economy are the key factors, the RBA said.
Falling commodity prices and a stubbornly high Australian dollar which was still near 80 U.S. cents on Friday prompted the economic downgrades.
The RBA believes the economy is now on track to grow by just 2. 5 percent in 2015 after earlier predictions of 2.75 percent growth.