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Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Global credit agency Fitch Ratings has affirmed Australia’s top-tier AAA rating, saying the economy has weathered the COVID-19 pandemic well, reflecting a successful virus containment.
Treasurer Josh Frydenberg jumped on the announcement, saying Australia remains one of only nine nations to hold a AAA credit rating.
“Fitch says we have ‘weathered the pandemic well compared with peers’ and ‘Australia’s labour market appears to be on a stable path to recovery, supported by the JobKeeper program’,” Mr Frydenberg tweeted.
However, Fitch has kept Australia’s rating on a negative outlook, reflecting uncertainty around the medium-term debt trajectory following the significant rise in public debt caused by the response to the pandemic.
“Policy settings are set to remain accommodative, although we project the bulk of fiscal stimulus has now passed,” Fitch said in a statement on Monday.
“Risks remain tilted to the downside, reflecting the possibility of additional and broader lockdown measures to contain any resurgence of the virus.”
However, the vaccine rollout should gradually ease these risks over the year and support domestic sentiment, it said.
Australia’s nationwide vaccine rollout started on Monday.
Shadow treasurer Jim Chalmers said by sticking with the negative outlook, Fitch is signalling there is still a long way to go in Australia’s recovery.
“The biggest threat to our recovery is Scott Morrison and Josh Frydenberg prematurely declaring victory,” Dr Chalmers told AAP.
“(This ignores) the fact that over two million Australians still don’t have work or enough work, wages are stagnant, and our economy had become less dynamic and resilient well before the pandemic.”