Bulletin: Australia's Strong Public Finances Provide Some Immunity To Coronavirus Shock

MELBOURNE (S&P Global Ratings) Feb. 13, 2020--S&P Global Ratings said today that although the effects of the ongoing novel coronavirus (COVID-19) outbreak will stymie economic growth in Australia (AAA/Stable/A-1+), they are unlikely to negatively affect the sovereign rating. The outbreak comes soon after several major natural disasters in Australia, including bushfires and floods (see "Australia Sovereign And State Ratings Can Accommodate Bushfire Impact," published Jan. 12, 2020), the combined effect of which could weaken some fiscal metrics. However, we still expect the general government budget, which includes the consolidated Commonwealth and subnational governments, to remain a key credit strength. This expectation underpins our 'AAA' ratings on Australia and is key to the stable outlook. We forecast that the outbreak will

...February 12, 2020 MELBOURNE (S&P Global Ratings) Feb. 13, 2020--S&P Global Ratings said today that although the effects of the ongoing novel coronavirus (COVID-19) outbreak will stymie economic growth in Australia (###/Stable/A-1+), they are unlikely to negatively affect the sovereign rating. The outbreak comes soon after several major natural disasters in Australia, including bushfires and floods (see "Australia Sovereign And State Ratings Can Accommodate Bushfire Impact," published Jan. 12, 2020), the combined effect of which could weaken some fiscal metrics. However, we still expect the general government budget, which includes the consolidated Commonwealth and subnational governments, to remain a key credit strength. This expectation underpins our '###' ratings on Australia and is key to the stable outlook. We forecast that the outbreak will trim 50 basis points (bps) from Australia's real GDP growth in 2020, which means calendar-year growth should be around 1.7% (see "Global Credit...

Bulletin