Fitch: Tough budget necessary to retain AAA rating

Fitch Ratings has warned the Australian government it needs to present a tough budget in May to hang on to its prized AAA credit rating.

Since the global financial crisis only 14 of more than 200 national governments are still rated AAA by all three key credit rating agencies: Moody’s, Standard and Poor’s (S&P) and Fitch.

“The AAA rating is pinned on the strength of the government’s fiscal position and if it doesn’t have that, we have less cause to see it as a AAA-rated sovereign, given how weak the banking system is in terms of its external liquidity,” S&P credit analyst Kyran Curry told the Australian Financial Review.

“To be consistent with maintaining an AAA rating … the government would really need to stabilise its fiscal position as soon as possible.

“If there is stress in the banking system like in Europe, [its] liabilities could migrate on to the government’s balance sheet.”

Trending

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments