Strong fiscal outcomes are important......>

AUSTRALIA: Strong fiscal outcomes are important for the 'AAA' rating on

Australia. That's according to a recent report by S&P Global Ratings. The

Australian gov't is on target to return its budget to surplus after a decade in

deficit. This is one reason why we revised our outlook on the sovereign's 'AAA'

rating to stable from negative on Sep. 21, '18. Since revising our outlook, the

RBA has further lowered interest rates in an attempt to stimulate waning

economic activity," said S&P Global Ratings credit analyst Anthony Walker. "As

the official cash rate in Australia moves toward zero there have been growing

calls for the government to increase fiscal stimulus, including infrastructure

spending, to stimulate and support the slowing economy. If this fiscal stimulus

involves substantial spending initiatives & changes the trajectory of the

budget, then doing so could increase downward pressure on our rating & outlook

for Australia." While spending initiatives are likely to support the economy,

they're also likely to weaken Australia's fiscal flexibility to respond to

future unforeseen economic shocks.