Formal S&P credit rating decision in July

Standard & Poor's will make a formal decision on Australia's triple-A rating in late July.

Global credit rating agency Standard & Poor's is not expected to formally announce its decision on Australia's credit rating until late July.

However, reports suggest the agency is considering confirmation of Australia's triple-A rating, ending weeks of speculation that it was about to be cut.

Commonwealth Securities chief economist Craig James says in a research note that S&P used a property seminar in Sydney on Wednesday to confirm the rating with a stable outlook.

Mr James says S&P director of sovereign rating Craig Michaels indicated to the seminar that Australia's economic resilience was a key underpinning factor for maintaining the rating.

He noted reforms in recent years have improved the flexibility of the nation to respond and deal with shocks.

"Given that global financial markets are on edge with the coming UK referendum on European Union membership, the confirmation of Australia's credit rating provides reassurance for local investors," Mr James says.

However, Mr Michaels did note there has been some "fiscal slippage" in recent years and this would continue to be monitored.

But he assumes whatever party takes power at the July 2 federal election, it would "muddle through" and meet budget targets over time.

While other agencies - Moody's Investors Services and Fitch Ratings - were quick to respond to the May 3 budget, S&P said at the time it wanted to look through the detail in the coming weeks before making a formal response.


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Source: AAP



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