Australia Rating Outlook Cut to Negative From Stable by S&P
- S&P gives one-in-three chance of downgrade within two years
- Lack of clear winner dents prospect of fiscal consolidation
S&P Lowers Australia Outlook to Negative
This article is for subscribers only.
S&P Global Ratings cut the outlook on Australia’s AAA credit rating to negative from stable as it warned the prospect of fiscal-policy gridlock could thwart government attempts to rein in a budget deficit.
The agency acted following Saturday’s federal election, which hasn’t delivered either Prime Minister Malcolm Turnbull’s Liberal-National coalition or the main opposition Labor Party a strong mandate, potentially weakening the eventual winner’s ability to push through fiscal savings measures. While the coalition is edging ahead as counting continues, it remains unclear whether it will gain enough seats to form government in its own right.