Commonwealth Bank of Australia analysts say that the numbers currently show the rating should be AA+, not AAA.
- Despite a clear and quick improvement in the economic situation, the Australian government has spent essentially all the potential improvement in the deficit on new stimulus
- The trajectory for net debt/GDP has dropped materially, because the implied GDP number is higher
- The government has made a clear decision to choose short-term stimulus over medium-term fiscal repair
- Rating could be lowered as soon as the next annual S&P review
- A loss of the triple A rating would have little impact on government bonds
AUD drifting even lower on the session:
