Treasurer Scott Morrison faces a bleak economic outlook framing his first budget in May with leading economists warning of weakening growth and stagnant wages through the rest of 2016.

More than two dozen economists from leading banks and universities have warned that Australia will face below-trend economic growth this year, a further collapse in mining investment, and a lacklustre 12 months on the sharemarket.

It puts the Turnbull government's election-year budget in an impossible position, exacerbated by warnings from Treasury secretary John Fraser this week that serious cuts need to be made to the budget in coming years if we want to avoid raising taxes.

The 26 leading economists from financial markets, academia, consultancy and industry who took part in this year's BusinessDay Scope economic survey say Australia will experience below-trend economic growth this year, with the unemployment rate stagnating rather than improving, and wage growth barely matching inflation.

They also say US economic growth will remain weak, Chinese growth will weaken and the price of iron ore will stay low while the terms of trade weaken.

HSBC's chief economist Paul Bloxham says Australia's housing boom is finished.

It will be a muddling-through kind of year, with little to drive growth.
They say home prices, which last year soared 11.5 per cent in Sydney and 11.2 per cent in Melbourne, will this year climb just 2 and 2.8 per cent.

It means the heady days for those cities' house prices are well and truly over, with the double-digit growth rates of the last few years all but evaporating in 2016.