Why is Australia the fastest growing AAA-rated commodity exporter?

By Enterprise Monkey

Credit ratings agency Moody’s has said that Australia is the fastest growing AAA-rated commodity exporter this year — despite growing government debt.  But precisely what accounts for the sunny outlook? And can it be sustained in the long term?

Three letters: GDP
Moody’s forecasts faster GDP growth in Australia than in some of its fellow AAA-rated commodity-exporting peers, including New Zealand, Norway and Canada. Even with government debt set to rise to 41 percent of GDP by 2017, Australia will still be less burdened than Canada and a handful of other AAA-rated sovereigns .

What mining boom?
Commodity prices may be on the rise, but they likely won’t reach the heights of previous years. However, a weaker Australian dollar has resulted in a more robust service sector and record-low interest rates have led to an increased market share for education services and tourism.

The power of the lower dollar
The weakened Aussie dollar has also made the country’s non-commodity exports more affordable for consumers. As a result, the country has reaped the benefits of an increased share of global demand and higher export volumes.

How long can this last?
House prices in Australia have been on the rise in recent years, and the country’s ongoing dependence on foreign investment has left it vulnerable to any negative shocks offshore.  "Still, the robustness of Australian institutions shores up investor confidence and mitigates the risk of any abrupt tightening in financing conditions," Moody's said. Let the boom roll on...

Business Review Australia & Asia's October issue is live. 

Follow @BizReviewAU on Twitter. 

Business Review Australia is also on Facebook. 

Share

Featured Articles

People Moves: Pine Labs, Deutsche Bank, McKinsey, Fortinet

Pine Labs names former Amazon exec as chief people officer, Fortinet hires government affairs leader for APAC, McKinsey India poaches Accenture HR exec

Dialight envisions a world of industrial safety with LEDs

Reliance on inefficient lighting technologies are not only harmful to the environment, but also increase injury risk and cost

Top 10: Must-see speakers at TECH LIVE LONDON 2022 event

Technology leaders from IBM, Oracle, Vodafone, JP Morgan, Accenture and the US Space Force are among the 80-plus speakers at upcoming TECH LIVE LONDON

Vodafone Business cyber leader Kawalec speaks at Cyber LIVE

Leadership & Strategy

Twitter timeline – how Musk pulled off a hostile takeover

Leadership & Strategy

Top 10 Asia restaurants, from Tokyo’s Den to Bangkok’s Sorn

Leadership & Strategy