Fitch Ratings agency has affirmed its ratings for Australia and says its outlook is stable.

In a statement, the global ratings agency affirmed Australia's foreign and local currency issuer default ratings at AA-plus and AAA, both with stable outlooks.

The short-term foreign currency rating is affirmed at F1-plus and the country ceiling is affirmed at AAA.

London-based Fitch Sovereign team senior director Paul Rawkins said sound public finances, a strong banking system and a proven track record of navigating the economy through adverse shocks underpin Australia's sovereign ratings.

Fears that this track record would fall victim to a faltering property boom at end-2003 have been mitigated by soaring demand for Australia's mineral exports, he said.

Once again, Australia has not disappointed those who would characterise it as a `lucky country'.

Fitch said Australia was enjoying its 15th consecutive year of economic expansion.

Higher commodity prices, driven by strong Chinese demand, had ratcheted up Australia's term of trade to near historical highs, boosting corporate profits, tax revenues and, to a lesser extent, the Australian dollar, it said.

These developments have been accompanied by a rebalancing of growth away from consumption towards investment, particularly in the under-resourced external sector, the agency said.

Even so, the authorities remain vigilant and recently raised interest rates again to curb inflation amid firm domestic demand and record low unemployment.

The agency said the major near-term threat to Australia's credit outlook is from the unpredictable course of commodity prices and their potential impact on the exchange rate, interest rates and incomes.