The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
25 DAYS UNTIL OUR UNMISSABLE FLAGSHIP CONFERENCE 29-31 JULY, GOLD COAST
25 DAYS UNTIL OUR FLAGSHIP CONFERENCE 29-31 JULY, GOLD COAST
SECURE YOUR SPOTDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
30
print
Print
OtherDinah Lewis BoucherWed 24 Jun 20

Australia Maintains AAA Credit Rating

a298ea4e-cc4a-454d-bcfb-5fbd372249c2

Moody’s says Australia’s economic strength will continue to underpin the AAA rating, notwithstanding the deep economic shock caused by the coronavirus crisis.

Australia is one of only 10 countries to retain the triple-A status, which impacts on the cost of borrowing by state governments and banks, from three leading credit rating agencies.

Moody’s stable outlook reflects its forecast that downside risks to the credit profile are contained by the “underlying resilience of the economy” and Australia's “effective policy-making institutions”.

Treasurer Josh Frydenberg said that the rating was reflective of the federal government’s economic response to the pandemic, with $260 billion—or 13.3 per cent of GDP—injecting the economy in response to Covid-19.

▲ Frydenberg said Australia's Aaa rating was "an expression of confidence" in the economy.


The latest assessment from Moody's means all three major ratings agencies, including Standard & Poor’s and Fitch Ratings, puts Australia as one of only 10 countries to have a triple-A rating.

But the health-turn-economic crisis will take its toll, Moody's expects GDP to fall by around five per cent in 2020.

“While large, the fall in GDP is smaller than in other advanced economies in general, consistent with signs that more normal work and spending behaviours are gradually returning as the epidemic recedes in the country.

“In Moody's assessment, the resilience of the Australian economy supports a return to positive growth next year, without any significant long-lasting impact on growth potential once the crisis passes.”

Australia entered the coronavirus pandemic with a relatively moderate debt burden, which Moody's says offered the scope to implement major fiscal policy support.

Moody's still forecasts Australia's general government debt burden to rise to above 50 per cent of GDP in the fiscal year ending June 2021. This is up from 41.8 per cent in fiscal 2019. Moody's expects further modest increases in the following years.

“While such a debt burden would be Australia's highest in several decades, it would also remain consistent with other Aaa-rated sovereigns, most of which are facing a similar sudden debt shock,” Moody's says.

“Compared to other advanced economies, the initial jump in the debt burden is likely to be less large for Australia due to a somewhat less acute fall in growth.”

Earlier this month, Frydenberg conceded the nation would enter its first recession, breaking a 29-year run.

Australia's economy contracted 0.3 per cent in the March quarter and is likely to contract around 8 per cent in the June quarter.

The World Bank estimates that 90 per cent of global nations are expected to experience a recession over the first half of 2020.

CommSec chief economist Craig James said Australia is ending the 2019 financial year with a cash rate of 0.25 per cent, unemployment rate at 7.1 per cent and underlying inflation rate at 1.75 per cent.


OtherResidentialAustraliaFinanceOther
AUTHOR
Dinah Lewis Boucher
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Carparking Correlation: How Parking Fees Provide Office Sector Health Check

Taryn Paris
6 Min
Molti chief Ben Teague out front of 32 Mercer Road Aramadale (rendering)
Exclusive

Buy to the Sound of Cannons: Molti’s Counter-Cyclical Move to Melbourne

Leon Della Bosca
5 Min
Exclusive

Tapping the Bunnings ‘Halo Effect’

Taryn Paris
5 Min
Exclusive

‘Construction Not a Scale Game’: Hutchinson

Phil Bartsch
9 Min
Nation's build-to-rent project Charlie Parker in Sydney's Parramatta where more projects are being located and built outside the CBD.
Exclusive

Foreign Capital Still Dominates BtR but Things are Changing

Marisa Wikramanayake
7 Min
View All >
The construction site which will one day become Newcastle Tallest Tower by Urban Property Group
Residential

Urban Property Group Reveals Newcastle Tallest Tower Plan

Renee McKeown
ESR building ESR completes delisting
Industrial

ESR Reveals New Team After Hong Kong Delisting

Leon Della Bosca
Exclusive

Carparking Correlation: How Parking Fees Provide Office Sector Health Check

Taryn Paris
The city with Australia’s highest parking rates, and cheapest public transport fares, is also proving our best performin…
LATEST
The construction site which will one day become Newcastle Tallest Tower by Urban Property Group
Residential

Urban Property Group Reveals Newcastle Tallest Tower Plan

Renee McKeown
3 Min
ESR building ESR completes delisting
Industrial

ESR Reveals New Team After Hong Kong Delisting

Leon Della Bosca
3 Min
Exclusive

Carparking Correlation: How Parking Fees Provide Office Sector Health Check

Taryn Paris
6 Min
Bunnings Clyde North
Markets

Bunnings Sold On as Charter Hall Doubles Down on Retail

Leon Della Bosca
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/australia-economy-aaa-credit-rating-recession-moodys