S&P affirms Australia's AAA/A-1+ ratings; Outlook remains Negative
The US-based ratings agency, S&P, in its latest credit review report on Australia, affirmed Australia’s sovereign credit ratings at AAA/A-1+ while maintaining a negative outlook.
Key Points:
Sovereign credit ratings benefit from country's strong institutional settings, resilient economy, flexible monetary policy, and low government debt.
The negative outlook reflects risks to government's fiscal consolidation plan and risks to financial stability.
There's still uncertainty around the ability of budgetary position to return to surplus by early 2020s.
The potential for wage growth remains low and poses downside risks to fiscal revenue.
Economy to be highly vulnerable to any major shift in offshore capital flows.
Expect Australia's net general government debt to peak at close to 26.3% of GDP in the fiscal year ending June 30, 2020.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
