One of the world’s most important rating agencies says the coronavirus outbreak will affect the Australian economy but will not affect the federal government’s rating.
S & P Global said on Thursday that they believe the outbreak will reduce Australia’s GDP growth by half a percentage point, but this does not mean it will directly affect Australia’s credit rating. Australia is one of the 11 countries with the highest credit ratings given by the three major rating agencies in the world.
S & P is a virus and this summer’s forest fires will have a short-term blow on the economy and federal and state government budgets, but this does not mean that credit ratings will be dangerous. “A short-term and temporary delay in budget balance will not in itself undermine Australia’s creditworthiness.” Their prediction of the virus is based on the epidemic being brought under control in March and the travel ban on China being lifted by the second quarter.
