Australia is coping "incredibly well" against various international headwinds, says Scott Morrison, as the stock market suffered its worse drop in a month.
Renewed global concerns about a slowing Chinese economy has seen shares fall nearly four per cent, while the dollar has struck a six-and-a-half year low.
"These are obviously difficult days, there are lots of headwinds ... we know that we have to swim against the tide in many respects, but I think we are swimming against the tide incredibly well," Mr Morrison told Sky News.
But the federal treasurer said the government has to focus on what it needs to do to support the Australian economy, rather than becoming overly focused on what is happening externally.
Continued uncertainty about the domestic outlook has dampened confidence among consumers after the initial jubilation of having Malcolm Turnbull become prime minister this month.
The ANZ-Roy Morgan gauge of consumer confidence has tumbled 3.4 per cent in the past week, partially reversing the record 8.7 per cent surge of the previous week in response to the toppling of Tony Abbott as Liberal leader.
"While Turnbull's appointment was greeted with considerable optimism, the challenges facing Australian households remain front of mind and make it difficult to sustain a lift in confidence," said ANZ's co-head of Australian economics Felicity Emmett.
A separate survey on Tuesday shows barely any change in voters' thoughts on the economy in the past six months.
The latest Essential Research online poll found almost a third of respondents believe the economy is in a poor state, compared with about 25 per cent who described it as "good".
Nearly one in four believe the economy is heading in the "wrong direction".
A new study by the International Monetary Fund cements these concerns.
It believes the weak commodity price outlook could subtract one percentage point annually from economic growth in commodity exporting countries such as Australia over 2015 to 2017, compared with the preceding three years.
Annual Australian economic growth slowed to just two per cent as of June, well below the long-term average of 3.25 per cent.
Other commodity-based countries such as Canada and Brazil are in recession.
JP Morgan chief economist Stephen Walters does not expect Australia to follow suit, but says there is growing talk among the international financial community of such an event.
"While there is growing chatter about recession, no one yet is prepared to put a negative growth forecast where their gloomy mouth is," Mr Walters says in a new report.
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