In Goldman Sachs report titled 2014 Outlook: Australia, The Odd One Out, it said that Australia will lagged behind as the rest of the world recovers in the global economy.

In as much as Australia is the world's 12th largest economy to expand by 2 per cent in 2013, this figure is sluggish as compared to what was expected from Australia. The 2 per cent expansion in the economy is lower than the predicted 2.5 per cent for 2013 and relatively lower from 3.8 per cent in 2012.

"Relative to the acceleration forecast in the global economy, in Australia we expect economic growth to decelerate in 2014," the Goldman Sachs report stated.

Australia had been growing in the past 22 years, but economic concerns turned this growth upside down.

The biggest factor to Australia's predicted slow growth in the coming years is the declining demand from its chief trading partner China. Australia's non-mining industry had been suffering since the slack of demands from China.

Key Points of the report:

  • The government and corporate sectors will continue to restrain spending
  • Significant deterioration in Australia's fiscal position is imminent
  • Large non-mining projects fail to provide an offset to declining mining investment
  • A new wave of investment projects will be required to avoid a more prolonged decline in investment beyond 2014
  • Housing investment is going to peak mid-2014 and then face its own decline
  • Investors' demands to continue until falling rental yields or higher rates change to economics
  • Non-mining growth will need to accelerate to 3.5 year over year by the end of 2014 calendar year

The report also noted that market growth will dip in 2014 but will pick up between 3.5 and 4 per cent in 2016 and 2017 if the Reserve Bank of Australia acts immediately.

RBA should cut rates by March of 2014 and in 2015, the report suggested.

"We expect a...gradual path for RBA rate hikes to the end of 2017 where we forecast the cash rate at 4.5% by December 2017," the report said.

Meanwhile, as the U.S. economy improves and the AUD weakens, Goldman suggested these six Australian stocks to watch for having significant business offshore:

21st Century Fox, entertainment (FOX)

Macquarie Group, financial services (MQG)

Brambles, logistics and transport (BXB)

Amcor, global leader in packaging solutions (AMC)

Henderson, UK-based asset management (HGG)

Cardno, civil engineering consultancy (CDD)

BHP and Santos

Crown Resorts