Bulletin: Australian State Of Victoria Budget Highlights Fiscal Setback From COVID-19

MELBOURNE (S&P Global Ratings) Nov. 24, 2020--S&P Global Ratings said today that the budget presented by the state of Victoria highlights the substantial economic and fiscal damage caused to state finances by the COVID-19 outbreak and containment measures. Victoria has controlled the second-wave outbreak, and the relaxation of restrictions will support a resumption of economic activity, but the state has been hit by the largest economic shock in its post-war history. While debt servicing should remain manageable due to low interest rates, we project debt levels to rise well beyond our previous expectations as the government rolls out significant stimulatory measures such as material new infrastructure spending. This may mean Victoria's fiscal and economic shock could take many more years

...November 23, 2020 MELBOURNE (S&P Global Ratings) Nov. 24, 2020--S&P Global Ratings said today that the budget presented by the state of Victoria highlights the substantial economic and fiscal damage caused to state finances by the COVID-19 outbreak and containment measures. Victoria has controlled the second-wave outbreak, and the relaxation of restrictions will support a resumption of economic activity, but the state has been hit by the largest economic shock in its post-war history. While debt servicing should remain manageable due to low interest rates, we project debt levels to rise well beyond our previous expectations as the government rolls out significant stimulatory measures such as material new infrastructure spending. This may mean Victoria's fiscal and economic shock could take many more years than its peers to recover. We placed our long-term rating on the state of Victoria on CreditWatch with negative implications on Aug. 5, 2020, pending greater clarity about the fiscal effect...

Bulletin