Credit ratings robust: S&P

The economies of Australia and New Zealand are in good shape, with low Government debt and tame inflation, indicating their credit ratings are unlikely to change, says Standard & Poor's.

Exports and tourism revenue for both countries are likely to fall because of the terrorist attacks in the United States on September 11.

The Tasman neighbours are rated AA+, the second-highest credit rating that Standard & Poor's gives. Both ratings are on a stable outlook.

"We are very comfortable with ratings right now" in both countries, said Chew Ping, associate director of sovereign ratings at S&P.

"The rating is pretty robust as it is now - even if the global economy takes a turn for the worse," he said.

The IMF has predicted that the world economy will grow 2.6 per cent this year, its slowest expansion in eight years.

Australia's economy grew 0.9 per cent in the second quarter from the previous three months.

New Zealand is expected to have grown 1.4 per cent in the second quarter, according to a Bloomberg News survey.

The gross domestic product report will be released today.

"Australia's and New Zealand's domestic economies are very much stronger than other Asian countries and compare favourably with the countries in the euro zone," said Mr Chew.

"A slowing in global demand could impact on trade numbers for Australia and New Zealand, and damaged US consumer confidence also could flow through indirectly into Australia and New Zealand confidence levels."

The economies of both countries were tipped to weaken, but still grow.

Exports make up about 21 per cent of Australia's economic production, with the largest markets Japan and the US.

Exports account for about 30 per cent of New Zealand's economic output.

"For both Australia and New Zealand, what underpins the ratings is low Government debt, economic resilience and a low-inflation environment - this enables them to have substantial flexibility in terms of fiscal position," Mr Chew said.

"One-off Government budget deficits would not damage Australia's or New Zealand's rating."