Ratings agency upgrades Aussie debt outlook on budget expectations

Source: Xinhua| 2018-09-21 14:27:17|Editor: Liangyu
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SYDNEY, Sept. 21 (Xinhua) -- Global ratings agency Standard and Poor's on Friday raised Australia's debt outlook from "negative" to "stable" and maintained the country's sovereign credit rating at "AAA", citing positive budget expectations in the coming decade.

"We expect the general government fiscal position to return to surplus by the early 2020s, as the central government's continued focus on fiscal prudence turns higher revenue collection into better budget performance," the agency said in a statement.

The slowdown in property prices was also not expected to weigh heavily on consumer spending and the financial system in general, according to the agency's analysts.

"Australia's weak external position means that its other sovereign credit factors, including the fiscal factors, need to be strong to keep the sovereign rating at the highest level on our scale," S&P added.

"A stronger fiscal position would also be a strong buffer to absorb the consequences of an abrupt weakening of the housing market and the vulnerabilities that event could bring to financial stability.

"While our base case is for a soft landing, our ratings could come under pressure if house prices fall sharply and increase risks to fiscal accounts, real economic growth, and financial stability."