Consumer confidence has slumped to a four-month low in a week of gloomy economic news but Resources Minister Josh Frydenberg predicts urbanisation and a growing middle class in India will open doors for Australia.
Confidence dropped 3.5 per cent in January to 97.3 points, suggesting there are more pessimists about the economy than optimists, according to the Westpac/Melbourne Institute index of consumer sentiment.
The figures followed global growth downgrades from the International Monetary Fund for the third time in less than a year, sparked by the Chinese slowdown and weak commodity prices.
The IMF has downgraded its growth forecasts for China and expects iron-ore export heavyweight Brazil to remain mired in recession in 2016 amid lower Chinese demand.
Mr Frydenberg says the IMF's global growth forecasts of 3.4 per cent in 2016 and 3.6 per cent in 2017 (down 0.2 percentage points from estimates in October) are still very strong.
He predicts the urbanisation of India and its swelling middle class will step in to fill the breach as China's economic growth slows.
"Other opportunities in the region, particularly in ASEAN countries, particularly in India, will hopefully meet the hole that has been left by the slowdown in China," he said on Wednesday.
"(India) haven't gone through the urbanisation and development that China has but under the Modi government they're very intent on following that path."
Iron-ore shipments to China hit a record in December as the world's second-largest economy increased its steel exports to India, Mr Frydenberg said.
Though other resource-dependent economies such as Brazil and Canada were technically in recession last year, Australia continued to grow strongly, creating 300,000 jobs.
Mr Frydenberg says Australia can also expect strong growth prospects in tourism as the Indian middle class grows.
Figures on Tuesday showed annual economic growth in China had slowed to a 25-year low of 6.9 per cent.
Westpac chief economist Bill Evans said the negative news about sharp falls on global share markets and plummeting oil prices sparked this month's gloomy confidence reading.
But despite being the lowest confidence reading since September, it was still 4.3 per cent above levels from a year ago.
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中国经济增长创近25年最低 澳元跌至七年低点
