Moody’s: Australia’s resilient economy faces fiscal consolidation challenges

The US-based rating agency, Moody’s Investors Service, publishes the latest report on the Australian economy, highlighting the following key points.

“Australia’s resilient economy faces fiscal consolidation challenges.

Australia’s slower nominal GDP growth compared with the commodity boom years has put pressure on government revenue growth.

Australia’s (Aaa stable) credit profile reflects its very high economic strength, buttressed by the country’s robust growth potential and demonstrated flexibility in adjusting to a changing economic environment.

A solid institutional framework – including transparent and effective monetary policy and financial regulation – also underpins Australia’s creditworthiness, lowering the probability and impact of potential economic and financial shocks.

Australia’s moderate debt burden relative to Aaa-rated peers also supports its sovereign rating, although the government continues to face challenges in fiscal consolidation.”