The Hon Josh Frydenberg MP
23 June 2020
AUSTRALIA’S AAA CREDIT RATING AND STABLE OUTLOOK REAFFIRMED BY MOODY’S
Moody’s has today reaffirmed Australia’s AAA credit rating and maintained the stable outlook supported by the “underlying resilience of the economy” and our “track record of proactive and effective policymaking.”
In its report, Moody’s notes that Australia’s “diversified economy, adaptable labour markets and flexible exchange rate” will continue to support growth while our “fiscal strength will remain broadly resilient” supported by “sound institutions with track records of responding effectively to shocks”.
Today’s report confirms Australia has maintained a AAA credit rating from all three major ratings agencies in an expression of confidence in the Morrison Government’s handling of the coronavirus crisis.
Moody’s notes that “the fall in GDP is smaller than in other advanced economies” with “the resilience of the Australian economy supporting a return to positive growth next year.”
We are not through this crisis yet but with restrictions starting to ease, there are encouraging signs across the economy. Consumer confidence increased for nine consecutive weeks after the announcement of JobKeeper recovering around 93 per cent of the fall from mid-March. Business confidence rose in May and has recovered around 70 per cent of its record fall in March.
Australia entered this crisis from a position of economic strength which in the words of Moody’s provided “scope for the government to implement very large fiscal policy support packages.”
The Morrison Government’s economic response to the Coronavirus crisis is providing $260 billion or 13.3 per cent of GDP in support for workers, households and business.
This unprecedented level of support reflects the unprecedented moment that we find ourselves in.
Moody’s action today, in reaffirming our AAA rating and stable outlook, is a reminder of the importance of maintaining our commitment to medium term fiscal sustainability.
Our disciplined economic and budget management saw the Federal Budget return to balance for the first time in 11 years and the Budget was on track to achieve a surplus in 2019-20 before the COVID-19 outbreak.
Our measures are temporary, targeted and proportionate to the challenge we face and will ensure Australia bounces back stronger on the other side, without undermining the structural integrity of the Budget which Australians have worked so hard to restore.