S&P downgraded Australia’s rating to AAA “negative”
Australia's sovereign rating outlook was downgraded by Standard & Poor's Global Ratings on Thursday, without any remedial actions.
The outlook on 'AAA' rating was lowered to negative from stable. Accordingly, there is a one-in-three chance that the rating would be downgraded within the next two years if it believes that the Parliament is unlikely to legislate savings or revenue measures.
On credit ratings, the agency said along with strong institutions, a credible monetary policy, and floating exchange rate regime, Australia's public finances have traditionally been a credit strength for the sovereign rating.
S&P noted that without any forceful policy decisions, the government's fiscal stance may no longer be compatible with the country's high level of external indebtedness.
Australia's fiscal position continued to weaken delaying an eventual return to budget surpluses since the global financial crisis.