Fitch expects the Reserve Bank has reached the peak of its interest rate increases. -AAP Image
Australia's top-tier triple-A rating has been affirmed by global credit rating agency Fitch, which also believes the Reserve Bank has reached the end of its interest rate tightening cycle.
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Fitch Ratings affirmed the top-level rating on Friday, nodding to the nation's sound outlook for economic growth, strong institutions and high incomes per person.
The agency also expects the central bank has found the peak of its interest rate increases at 4.35 per cent.
While services inflation is proving sticky, the Fitch analysts believe the tightening so far will be enough to bring inflation back to the two-three per cent target range over the next two years.
The federal government's decision to bank revenue upgrades was highlighted as "a desire to maintain a fiscal stance supportive of reducing inflation and pursue prudent fiscal policies".
The credit agency expects the surplus delivered last financial year to turn into a deficit as commodity prices come down and structural spending pressures continue to rise, which is broadly in line with Treasury's own expectations.
Treasurer Jim Chalmers said his government's budget strategy was "right for the times".
"The Albanese government's combination of budget restraint, investments to lift the capacity of the economy, and targeted cost-of-living relief is all helping ease inflation in our economy," he said on Friday.
