International credit rating Moody’s has announced the outlook for Australia’s Aaa foreign and local currency rating ‘remains stable’. 

 

The rating is based on Australia’s ‘very high’ economic strength; ‘very high’ institutional strength; ‘very high’ government financial strength; and ‘very low’ susceptibility to event risk. 

 

Moody’s concluded that the country’s economic strength is based heavily on its overall diversity, as well as its overall performance during the last two decades, Australia’s relatively good growth prospects and high per capita income.

 

“The outlook is for some acceleration in the rate of economic growth, supported by the mining sector. In the next few years, investment in the mining sector (including LNG, iron ore, and coal) should remain strong, while private consumption continues to grow at about 3% annually, supported by a relatively strong labor market,” the agency concluded in its report.

 

The agency has backed Australia’s growth prospects, saying it expects the country to record a solid 3.0 to 3.5 per cent GDP.

 

“Moody's assesses Australia's institutional strength as very high, a classification shared by all Aaa-rated countries, and reflecting overall governance, rule of law, effective monetary and regulatory institutions, and transparency. And, in Australia's case, these features are reinforced by a strong commitment on the part of the major political parties to sound government finance and low public debt levels, an important feature for a highly rated government.”

 

The report cited a strong and stable political institution as one of the main reasons behind the country’s ongoing economic stability as well as strong investment from the resources sector.

 

The report can be found here

http://www.moodys.com/loginredirect.aspx?lang=en&cy=global&ReturnUrl=http%3a%2f%2fwww.moodys.com%2fviewresearchdoc.aspx%3fdocid%3dPBC_142921%26lang%3den%26cy%3dglobal