Treasurer Wayne Swan says Australia's economy is in good shape and can cope with the worst the world can throw.
Mr Swan said he had been consulting regularly with Australian regulators, the Treasury and with finance ministers from the G20 group of advanced economies over turmoil overseas.
He said Australian economic fundamentals remained strong and the International Monetary Fund report released on Sunday showed that clearly.
"Yesterday's report points to the fact that our economy has been very well run. Because of that we are in a very good position to cope with the worst that the world can throw at us," he told ABC radio.
"What we have got to do is closely observe these events as they unfold in Europe and the United States.
"What Australians can have confidence in is the fact that we are in the strongest part of the global economy, the Asia-Pacific, and our strength here, particularly in Australia, is far stronger than just about any other developed economy."
Mr Swan said he would not speculate on possible actions in event of a second global financial crisis.
Neither would he speculate on the response of the Australian Stock Exchange when it opens at 10am (AEST).
It will be among the first to give its verdict on the downgrading of the US credit rating over the weekend.
On Friday, the Australian share market followed other global markets, slumping by four per cent to its biggest one-day loss since the height of the global financial crisis almost three years ago.
Mr Swan has also rejected suggestions that the government's plan to return to surplus in 2012/13 was increasingly uncertain because of the slump in growth.
"The global situation will make things more difficult but the government remains committed to delivering our surplus as planned," he said.
