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Western Australia Stripped of Top Credit Rating by Moody’s

Western Australia was stripped of its top credit rating by Moody’s Investors Service as the state’s increasing reliance on resource royalties threatens efforts to repair its finances.

Moody’s lowered the state’s ranking to Aa1 from Aaa and changed its outlook to stable from negative, according to a statement today. The government’s assumptions for mining royalties are based on a “fairly optimistic forecast” for iron ore prices, while the state faces spending pressures due to rapid population growth, the ratings company said.