Australia will tip into a shallow recession in early 2009 as a slowing global economy reduces demand for our mineral exports, a leading investment bank says.

JP Morgan Australia chief economist Stephen Walters said downward revisions for global growth for the current quarter and the first quarter of 2009 had led to a more pessimistic outlook for the country.

Mr Walters forecasts Australian GDP growth of 0.7 per cent in 2009, down from 1.4 per cent, already downgraded last week from 1.8 per cent.

Australia's GDP growth for the rest of 2008 would fall to 2.1 per cent from the previous forecast of 2.5 per cent, he said.

"These new forecasts include expected falls in Australia's GDP in Q4 2008 and Q1 2009.