An economic forecaster says Australia will not experience...

An economic forecaster says Australia will not experience anything like the financial downturn occurring overseas.

But Dr Frank Gelber from BIS Shrapnel has told a business conference in Adelaide that Australian business investment will suffer because of a lack of finance.

He says this would be the result of a credit squeeze, not a fully-fledged financial crisis.

"We are not going to have the big recession they're having overseas," he said.

"We're having a downturn here, it won't rebound quickly, we've still got to see the fall in investment, again the result of the credit squeeze, feeding through to the rest of the economy."

Dr Gelber says while Australia is unlikely to go into recession, businesses must brace for a fall in investment because of a lack of financing.

"Overseas they've got a fully-fledged financial crisis, and major recessions in the developed world," he said.

"In Australia we haven't got anything like the depth of downturn, we haven't gone over the top on investment.