Moody's: Credit impact from Australian bushfires for govt remains manageable

The US-based rating agency, Moody’s Investors Services, is out with its latest assessment of the Australian bushfires on the domestic economic growth and the country’s sovereign credit rating.

Key Quotes:

“Credit impact from Australian bushfires for government remains manageable, but recurring fiscal costs set to rise.

Economic impact from Australian bushfires is also limited as so far bushfires have mainly hit sparsely populated areas.

Does not currently expect liquidity pressure to be significant as most affected states in Australia maintain strong liquidity positions.

Revised Australia’s GDP growth forecast down slightly to 2.1% in 2020.

Costs remain manageable for general govt, with immediate fiscal costs expected to be less than 0.1% of Australia’s GDP in 2020 and 2021.”

Earlier on Monday, S&P ratings agency reported that Australia’s pristine ‘AAA’ sovereign rating is not at “immediate risk” from the fiscal and economic impact of bushfires raging across the country’s east coast, as cited by Reuters.

AUD/USD clings to gains near four-day highs of 0.6920 amid trade deal optimism and expectations of the limited impact of the Australian bushfires on the economic situation.