Moody's affirms Australia's AAA credit rating
Australia is one of just 10 countries to retain its AAA credit rating through the coronavirus-induced global recession, after Moody's Investors Service affirmed the pristine rating and maintained its stable outlook for government finances.
Moody's said on Tuesday night that Australia's AAA stable credit rating reflected the economy's strengths and good governance, including health management, that will support the country's resilience in response to the coronavirus pandemic.
It warned the "unprecedented" global shocks from the coronavirus outbreak would lead to reduced Chinese demand for exports and increase the government's debt burden.
Moody's forecast the economy to shrink by 5 per cent this year, though it said the government's $150 billion in budget spending and support from the Reserve Bank of Australia would mitigate the severe contraction.
"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."
Moody's is more upbeat on Australia than its two competitors, S&P Global Ratings and Fitch Ratings, which have both put Australia's AAA credit rating on negative outlook