High Noon for Australia’s AAA Rating as Weak Wages Drag Budget
- Government could be first in 30 years to lose coveted grade
- Economists expect little change to updated deficit forecast
People walk in the Central Business District of Sydney on May 5, 2015.
Photographer: Peter Parks/AFP via Getty ImagesThis article is for subscribers only.
A worsening of Australia’s deficit in a budget update due at midday could trigger a downgrade of its top credit score. Politicians are worried; economists less so.
While the prospect of being the first government in 30 years to lose the coveted grade alarms lawmakers, some economists think its loss could pave the way for increased spending. Most predict the forecast deficit for the current fiscal year will be little changed from a May projection, and few are panicking about losing the AAA -- whether that happens this week, next year or at all.