S&P warns Recessionberg not to spend on virus

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And he’s stupid enough to listen:

S&P Global Ratings said today that although the effects of the ongoing novel coronavirus (COVID-19) outbreak will stymie economic growth in Australia (AAA/Stable/A-1+), they are unlikely to negatively affect the sovereign rating.

The outbreak comes soon after several major natural disasters in Australia, including bushfires and floods, the combined effect of which could weaken some fiscal metrics. However, we still expect the general government budget, which includes the consolidated Commonwealth and subnational governments, to remain a key credit strength. This expectation underpins our ‘AAA’ ratings on Australia and is key to the stable outlook.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.