NRMA president Alan Evans said the motoring organisation was also convinced there would be an increase in motor tourism from NSW to Canberra. ''Based on our experience, domestic tourism slowed markedly as a result of the increase in petrol prices.''

He said the NRMA expected a significant increase in demand for budget accommodation in Canberra over the holiday period as well as higher discretionary spending by tourists.

Chris Richardson, of Access Economics, said the combination of the drop in oil prices and currency would have several benefits for Canberra.

''The lower Australian dollar will encourage more Australians to holiday at home and will make it cheaper for overseas tourists to travel to Australia. It has already led to a significant increase in applications from students to study at the ANU,'' he said.

Canberra should also be protected from the worst of the private sector downturn with the Federal Government balance sheet in good shape and many of Canberra's private companies acting as service suppliers for government departments and employees.

Mr Richardson believes the worst hit areas will be those most reliant on the mining sector. He expects that iron ore prices will halve over the next 18 months and coal prices will fall by more than 30 per cent.

At the same time a large part of the finance sector is reeling with large scale job losses expected and the fall in consumer and business confidence threatening to affect other sectors of the economy.

But Canberra tourism authorities are far less confident about the effects on tourism.

''Normally it would be good news for the sector but you have the unknown of the financial fallout,'' general manager of Australian Capital Tourism Simmone Shepherd said.

The global financial insecurity meant it was too early to predict what effect the fall in petrol prices would have on tourism, she said.

One of the biggest positives for Canberra is that the fall in the petrol price will coincide with the opening of a range of new exhibits and facilities.

The National Gallery will open its Degas exhibition next month and the National Museum will stage its Charles Darwin exhibition. The new National Portrait Gallery will open and the War Memorial has a new exhibition Over The Front.

At a meeting of Canberra tourism officials held last week, MsShepherd said there was an air of quiet confidence.

''But it is a tough road ahead because we don't know what will come down the pipeline.''