The US stock markets tumbled on Wednesday, fuelling fears of a recession.

The Australian stock exchange plummeted yesterday after the poor international performance, dropping $60 billion yesterday.

The New York stock exchange rallied a little overnight, but it has done little to calm fears.

In the US, experts say there is a one-in-three chance of a recession within the next year.

Federal treasurer Josh Frydenberg said Australia is in a good position to tackle the coming challenges.

“I’m confident that the Australian economy is well placed to deal with the challenges that lie ahead, but we’re not complacent,” he told 3AW’s Neil Mitchell.

“We’ll continue to monitor global events very closely.

“Our track record of continuous economic growth is certainly the envy of the rest of the world.”

Mr Frydenberg said the government has no intention of backing away from meeting the surplus.

“We’re absolutely committed to the surplus,” he said.

“The economy continue to grow but we also need to pay down the debt to give us the fiscal flexibility to respond to downturns.”

The treasurer admitted international conflict is putting the global economic system under pressure.

“We cannot underestimate the impact that the US-China trade tensions are having on global confidence,” he said.

“That flows through to us.”

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