Australia’s budget highlights credit-positive growth recovery

Early Thursday in Asia, the global rating agency Fitch praised the Australian Budget, announced earlier in the week.

“Australia’s budget, presented by the government on 11 May, confirms that the recent strong economic and labor market recovery has resulted in an improvement in public finances, which may help to reduce downside risks to the country’s ‘AAA’ rating provided the recovery remains on track,” said the rating giant.

Fitch affirmed AAA rating in February but with a negative outlook while expecting “general government gross debt/GDP would peak in the fiscal year ending June 2023 (FY23) and then decline,” per the news.

However, the latest forecasts were cited helping for a “stronger outcome than we had assumed, meaning that the debt trajectory will start and peak at a lower level than we had anticipated,” per the latest announcement.

FX implications

AUD/USD fails to cheer the upbeat news as it contrasts with the S&P’s rating outlook, published on May 11, as well as market fears following the US inflation jump.

Read: AUD/USD: Pressured towards 0.7700 after US inflation showdown

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