Australia’s economy displaying resilience: Moody’s

Australia’s economy displaying resilience: Moody’s

Sydney, Oct 12 (IANS) Australia’s economy is continuing to display resilience to commodity price declines, however external financing risks do linger, global ratings agency Moody’s Investor Services said on Wednesday.

Australia’s growth should continue to outpace its commodity exporting triple-A (stable) rated peers New Zealand, Canada and Norway over the coming years as rising mineral exports offset weak prices, while the services sector ramps up from the drop in Aussie dollar, Xinhua news agency reported.

“The weaker Australian dollar and lower interest rates have allowed it to take an increasing market share of rising global demand for tourism and education services,” Moody’s said.

However, Australia’s budget deficit will be wider for longer than the Australian government projects and will cause the government debt to rise to around 41 per cent of the GDP next year, it said.

Sovereign ratings agencies have been alarmed at the deficit and lack of action to arrest growing debt, causing ratings house Standard and Poor’s to place Australia on CreditWatch negative.

Moody’s said, “constraints to fiscal consolidation are likely to persist”, while rapid increase in house prices and the reliance on foreign investment is exposing the economy and financial system to any negative shocks offshore.

“Still, the robustness of Australian institutions shores up investor confidence and mitigates the risk of any abrupt tightening in financing conditions,” Moody’s said.

“Australia’s long track record of robust growth illustrates its resilience in the face of such negative shocks.”

Leave a Reply

Please enter your comment!

The opinions, views, and thoughts expressed by the readers and those providing comments are theirs alone and do not reflect the opinions of or any employee thereof. is not responsible for the accuracy of any of the information supplied by the readers. Responsibility for the content of comments belongs to the commenter alone.  

We request the readers to refrain from posting defamatory, inflammatory comments and not indulge in personal attacks. However, it is obligatory on the part of to provide the IP address and other details of senders of such comments to the concerned authorities upon their request.

Hence we request all our readers to help us to delete comments that do not follow these guidelines by informing us at Lets work together to keep the comments clean and worthful, thereby make a difference in the community.

Please enter your name here