Advertisement
Advertisement

S&P Upgrades Outlook on Australia’s Aaa Rating to Stable From Negative

By:
Reuters
Updated: Jun 7, 2021, 06:41 UTC

(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.

FILE PHOTO: People are silhouetted against the Sydney Opera House at sunset in Australia

By Swati Pandey

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)

(Reporting by Kanishka Singh in Bengaluru; Editing by Himani Sarkar & Simon Cameron-Moore)

About the Author

Reuterscontributor

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products:

Did you find this article useful?

Advertisement