Fitch and Moody's have warned that extended political uncertainty could affect budget repair, putting Australia's prized 'AAA' rating at risk.
Australia's prized AAA credit rating could be at risk if post-election political paralysis damages the federal government's capacity to manage budget deficits, the key global ratings agencies have warned.
"Irrespective of the political composition of any new government, we could lower the rating if parliamentary gridlock on the budget continues and Australia's budgetary performance does not improve broadly as we expected a year ago," S&P said on Monday.
Rival ratings agency Fitch's sovereigns group director Mervyn Tang said while Australia's overall credit profile was still consistent with a AAA rating, he was worried "political gridlock that leads to a sustained widening of the deficit would put downward pressure on the rating".
Moody's Investors Service said the impact of any short-term political uncertainty would be limited but warned that the country's credit profile would remain in place only if efforts to repair the budget continued.
"The electoral outcome would affect the sovereign credit profile only if it changed broad policy priorities and the effectiveness of their implementation," senior vice president Marie Diron said.
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