Banking giant Citigroup Inc., on Thursday predicted that Australia's central bank, the Reserve Bank of Australia, would again raise borrowing costs at least one more time this year, as indications that the country's economic growth will not trigger inflation to shoot up above its target range.

Paul Brennan, a senior economist at Citigoup based in Sydney said that RBA Governor Glenn Stevens would raise the benchmark overnight cash rate target by 25 percentage point to reach 4.75 percent in the fourth quarter of this year.

Brennan earlier forecasted the RBA to increase cash rates up to 5.25 percent. On the average, majority of economic analysts in Australia had predicted the central bank to impose a 5 percent cash rate before the end of 2010.

According to Citigroup, economic growth was weaker than expected in the first quarter as business investment declined.

Brennan revised his growth forecast this year to 3.25 percent from his previous prediction of 3.5 % gross domestic growth.

Brennan told Bloomberg: "The RBA now has scope to pause for longer than we had previously thought likely. A period of steady lending rates through to later this year should underpin some improvement in confidence, benefiting both the consumer and housing construction."

He said that the decision of the RBA to halt interest rate increase could result to a faster return in consumer confidence.