Investing.com - As global economies grapple with soaring borrowing costs and decelerating growth, Australia stands well-positioned to weather the storm, thanks primarily to its robust consumer savings and strong export ties with China, according to Fitch Ratings.
The credit rating agency forecasts that Australia will experience a 1.5% economic slowdown in the current year, slightly lower than the Reserve Bank's prediction of 1.7%. Despite this dip, Fitch maintains that Australia remains healthier compared to other triple A-rated nations.
In fact, among only 11 countries retaining top-tier ratings from all three major agencies, Australia continues to hold its ground amidst financial turbulence.
Jeremy Zook, Fitch’s director of Asia sovereign ratings is optimistic about Australians utilizing their pandemic-accumulated savings as a cushion for increasing debt expenses. The Reserve Bank has already elevated the cash rate by 3.75 percentage points within a single year – marking one of the most rapid tightening cycles in recent memory.
Fueling domestic activity further is China's resumption of business operations following stringent COVID-19 measures which had temporarily stalled its $27 trillion economy (equivalent to $US18 trillion). In spite of recording one of their lowest growth rates in almost fifty years last year due to these restrictions - China’s reopening bodes well for Australian exports and overall economic stability moving forward.