CANBERRA, AAP – Fitch Ratings has upgraded Australia’s credit rating outlook to stable, from negative, indicating its top-tier triple-A rating is safe for the foreseeable future.

The global credit rating agency said the upward revision reflects its confidence in Australia’s fiscal consolidation path and stabilisation of debt over the medium term.

“(This is) supported by the underlying strength of the economic recovery, despite a near-term setback from recent pandemic-related lockdowns,” Fitch said in a statement.

“We expect Australia’s economic recovery to continue.”

It said a wave of COVID-19 cases that began in June, against a sluggish start to the country’s vaccination campaign, led to lockdowns in the two largest states in NSW and Victoria, which account for over half of national output.

“The pace of vaccination has accelerated in recent months, allowing a gradual easing of restrictions that will facilitate a strong rebound in consumption from pent-up demand, particularly households which have large accumulated savings to draw down, and have had access to targeted fiscal support during the lockdowns,” Fitch said.