S&P upgrades outlook on Australia’s AAA rating to stable from negative

Stock Markets2 hours ago (Jun 06, 2021 11:00PM ET)

(C) Reuters. FILE PHOTO: People are silhouetted against the Sydney Opera House at sunset in Australia, November 2, 2016. REUTERS/Steven Saphore

By Swati Pandey

(Reuters) -S&P Global Ratings upgraded its outlook on Australia’s coveted “AAA” sovereign rating to ‘stable’ from ‘negative’ on Monday citing the country’s “swift economic recovery” from the COVID-19 pandemic driven recession.

Australia’s A$2 trillion ($1.55 trillion) economy has rebounded sharply to above pre-pandemic levels thanks to the country’s successful handling of the coronavirus pandemic together with massive fiscal and monetary stimulus.

S&P said it was more confident now that the government’s fiscal deficit will narrow toward 3% of gross domestic product during the next 2-3 years after reaching a 10% deficit in the year-ending June 2021.

“The government’s policy response and strong economic rebound have reduced downside risks to our economic and fiscal outlook for Australia,” S&P said in a statement.

S&P added its concern over Australia’s high level of external and household debt has been moderated by the country’s strong track record of managing major economic shocks.

Australian Treasurer Josh Frydenberg welcomed the revised outlook, describing it as a “resounding expression of confidence” in the government’s economic management.

Australia is one of just nine countries in the world to boast a ‘AAA’ credit rating from all three major ratings agencies.

Australia is among a handful of countries globally that can boast an economy that’s larger now than before the pandemic.

On average, Australia’s rich world peers are 2.7% smaller than they were before the pandemic, according to research by Deloitte Access Economics, with the United Kingdom shrinking almost 9%, the European Union contracting by 5% and the United States 1% smaller.

Data out earlier showed Australia’s job advertisements climbed for a 12th straight month in May to reach their highest since 2008, prompting economists to predict the country’s unemployment rate would fall to 4.4% by end-2022, from 5.5% now.

($1 = 1.2932 Australian dollars)

S&P upgrades outlook on Australia’s AAA rating to stable from negative

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Stories

Discover

Exclusive – Indian scientists: We didn’t back doubling of...

2/2 (C) Reuters. FILE PHOTO: A health official draws a dose of the AstraZeneca's COVID-19...

Americans are curious about electric trucks, but low cost,...

3/3 (C) Reuters. FILE PHOTO: Chief engineer Linda Zhang poses next to the all-electric Ford...

Daimler and Volkswagen cut working hours, citing chip shortage

Stock Markets4 minutes ago (Jun 15, 2021 01:01PM ET) (C) Reuters. FILE PHOTO: Staff wear...

Popular Categories