Research Update: Australia Outlook Revised To Negative As COVID-19 Outbreak Weakens Fiscal Outcomes; 'AAA/A-1+' Ratings Affirmed

The government has announced several large stimulus packages to support the economy in response to the COVID-19 shock. We expect the government debt burden to weaken materially as a result. We have revised our outlook on Australia to negative from stable to reflect a substantial deterioration of its fiscal headroom at the 'AAA' rating level. At the same time, we are affirming our 'AAA/A-1+' long- and short-term local and foreign currency ratings. Our ratings on Australia benefit from the country's strong institutional settings, its wealthy economy, and monetary policy flexibility. The country's high external and household indebtedness as well as its vulnerability to weak commodity export demand moderate these strengths. On April 8, 2020, S&P Global Ratings revised the outlook

...- The government has announced several large stimulus packages to support the economy in response to the COVID-19 shock. We expect the government debt burden to weaken materially as a result. - We have revised our outlook on Australia to negative from stable to reflect a substantial deterioration of its fiscal headroom at the '###' rating level. At the same time, we are affirming our '###/A-1+' long- and short-term local and foreign currency ratings. - Our ratings on Australia benefit from the country's strong institutional settings, its wealthy economy, and monetary policy flexibility. The country's high external and household indebtedness as well as its vulnerability to weak commodity export demand moderate these strengths....

Research Update