Global credit rating Standard & Poor’s has affirmed Australia’s triple-A credit rating but has kept the outlook on negative.
“The negative outlook reflects our view that Australia faces fiscal and economic risks that are tilted toward the downside,” the rating agency said on Tuesday.
It warns it could lower the rating within the next two years if the COVID-19 outbreak causes economic and fiscal damage that is more prolonged than currently expected.
But it says the outlook could revert to stable if the general government fiscal balance improves broadly in line with its expectations as the economy recovers.
“Stronger fiscal outcomes would provide the sovereign with a buffer to absorb another potential economic or financial shock,” it says.
Australia is one of just 10 countries to have triple-A rating from all three main agencies, which includes S&P, Moody”s Investors Service and Fitch Ratings.