S&P affirms Australia AAA rating, outlook negative

The US ratings agency, Standard and Poor (S&P) published a latest report on the Australian economy, in light of Australia's external indebtedness and doubts over ability of Australian government to meet fiscal objectives.

Key Highlights:

Australia's external indebtedness creates vulnerability to major shifts in foreign investors willingness to provide capital

Has doubts over the ability of Australian government to meet fiscal objectives

Potential for wage growth and inflation to remain low remains a downside risk to the government's current projections

Balance of risks to government revenues remains negative

Expects fiscal deficits to widen again in the next couple of years

Expect net general government debt to peak a little higher than expected but to remain low at about 27% of GDP

Cautions it could cut Australia sovereign rating if loses confidence in surplus outlook

S&P sees Aus GDP around 2.3% this year

To rise to its potential growth rate in following years