Towards the close of last month, the Turnbull Government announced that Moody’s has maintained Australia’s AAA credit rating, with a stable outlook.
Moody’s has noted the Government’s record of “strong economic management” that has ensured Australia’s AAA credit rating which has been maintained with all three major ratings agencies.
According to the Treasury’s statement, Moody’s decision to reaffirm the status included Australia’s continued high levels of economic strength, robust growth potential, diversity and flexibility and strong regulatory framework.
Moody’s acknowledged that the Budget continued its commitment to fiscal consolidation, which they say is demonstrated by the “maintained objective” of the Government of returning the Budget to balance.
Moody’s also acknowledged APRA’s “proactive prudential policies”, fully supported by the Government, which are working to “bolster the resilience of the banking sector” and mitigate the risks of high household debt.
The rating’s agency also noted that Australia’s banking system is one of the most resilient among rated sovereigns and expect Australia’s solid economic growth to continue for the foreseeable future.
Furthermore, Moody’s also notes that Australia has scored high in fiscal strength because it is “driven by a moderate government debt burden relative to AAA-rated peers and low cost of debt.”