Oct 27, 2012

Australia - Australia welcomes Fitch affirming AAA rating

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SYDNEY: Australian Treasurer Wayne Swan Saturday welcomed a decision by ratings agency Fitch to affirm the country's AAA credit rating, days after his mid-year economic review lowered this year's growth forecast.

The affirmation overnight of the AAA rating with a stable outlook comes after the government last week cut its growth and budget surplus forecasts as worsening global conditions hurt revenues in the mining-driven economy.

"We manage our economy in the interests of working people and we've had a big tick from the rating agencies overnight," Swan told reporters.

In a mid-year economic review released Monday, Swan said real GDP growth was forecast at 3.0 per cent this fiscal year -- from 3.25 per cent predicted in May -- and shaved the budget surplus back to A$1.1 billion (US$1.13 billion).

"Coming just days after our mid-year Budget update, Fitch's confirmation of our AAA status is yet another validation of the government's fiscal settings which sit amongst the most impressive in the world," he said in a statement Saturday.

"Our rock solid economic fundamentals have proved resilient against challenging global headwinds, and while we are not immune from what happens overseas, we have every reason to be confident about our economy's prospects well into the future."

Australia dodged recession during the global downturn due to the relative resilience of Asia -- a crucial market for its resources exports -- along with a series of government stimulus packages.

It is among a handful of nations with top credit ratings with a stable outlook from the world's three major credit ratings agencies.

Fitch said the 'AAA' ratings reflected Australia's fundamental credit strengths, including a credible macroeconomic policy framework with room for flexibility and strong standards of governance.

- AFP/ck


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