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Bushfires may affect Australia's AAA credit rating

Sky News Australia logo Sky News Australia 4 days ago Sky News Australia

Credit rating agency Moody’s fears Australia’s credit rating could be affected if bushfire seasons become more severe.

“More frequent and severe natural disasters are likely to result in rising and recurring costs, testing the capacity of state and federal governments to pay the debts”.

In a statement Moody’s said: “Taking into account both the direct costs and indirect loss of revenue, we estimate that the cost of the bushfires will reduce Australia’s general government’s fiscal balance overall by around 0.1 per cent of GDP per year in the next two fiscal years”.

Moody’s still maintains its AAA credit rating for Australia, New South Wales and Victoria but could revise its assessment if natural disasters do become more severe.

Rival agency Standard & Poor’s however is more optimistic, saying affected states will be able to service the bushfire recovery costs and their credit ratings would not be affected.

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