After two years of "spectacular" growth, the ACT economy is starting to show signs of decline, new analysis has shown.
To inject new life into the territory economy, ANZ senior economist Cherelle Muphy has suggested the ACT government take advantage of historic low interest rates to fast-track infrastructure projects.
Ms Murphy's analysis of key economic indicators showed that while the ACT continued to outperform the national economy, the territory's fortunes have been in steady decline since the middle of last year.
It comes as a new ANZ/Property Council survey showed confidence in the ACT economy had taken a dive in the past quarter, with industry expressing a dim view of the territory's prospects for growth.
Unemployment has increased - although, at 3.9 per cent, it remains the nation's lowest rate - while house prices have begun to fall after years of strong and uninterrupted growth.
The territory's rapid population growth rate slowed in 2018 to 1.8 per cent.
Ms Murphy said the ACT had not been insulated from the economic headwinds slowing the national economy, including the tighter bank lending restrictions which have stifled activity in the housing market.
She projected the ACT economy would grow at 2.75 per cent in the next financial year, below the long-term trend of 3.4 per cent.
"The ACT economy has slowed ... there is no doubt about that," Ms Murphy said.
"I think it is probably a return to something that is normal and sustainable, because the past two years have been pretty spectacular in terms of growth.
"But if they [economic indicators] continue to worsen, then the story changes. Remember, we are part of a national economy that is slowing."
Ms Murphy said the Morrison government's planned $1.5 billion cuts to the federal public service, which were announced on the eve of the May 18 federal election, would "definitely hurt the ACT".
However, her analysis found that a number of economic markers were still tracking positively, including apartment building approvals. The ACT is also exporting more services than any other state or territory, on a per capita basis.
Spending on infrastructure peaked during the height of construction on the Gungahlin rail line, but has been in decline for much of the past year.
Ms Murphy said it was imperative that work on light rail's expansion to Woden started as soon as possible to continue the momentum generated by the project's first stage.
Following the Reserve Bank of Australia's decision on Tuesday to cut the official cash rate to a record low of one per cent, Ms Murphy said there was a "strong, strong argument" for the government to take on extra debt to fund infrastructure spending.
Chief Minister Andrew Barr said the government was already "fast tracking as much infrastructure as our small market can absorb".
However, Mr Barr said the interest rate cut had strengthened its case for exploring options to refinance the remainder of its $1 billion Mr Fluffy debt.
He planned to discuss refinancing options when he meets with investors during an upcoming trip to Singapore and London
The chief minister has separately written to Treasurer John Frydenberg, asking the federal government to waive the remainder of the Mr Fluffy loan, but has yet to hear a response.
Addressing Ms Murphy's analysis of the state of the ACT economy, Mr Barr said the territory could not grow at "spectacular" level each year.
Mr Barr said the pillars of the local economy remained strong, highlighting the ACT's "well above average" employment rate and relatively stable housing market.
Meanwhile, the latest ANZ/Property Council industry survey, to be published on Thursday, found confidence in the ACT and national economy has dropped in the past quarter.
Property Council ACT executive director Adina Cirson said the results indicated the industry had concerns about the looming cuts to the federal public service.