Sydney - Xinhua
Standard & Poor\'s (S&P) Ratings Services said on Friday it has affirmed its long-term AAA sovereign credit rating on Australia due to the country\'s economic resilience, public policy stability and sound financial sector. The ratings agency also affirmed the country\'s short-term A-1+ sovereign rating and stable outlook in a statement on Friday. \"The ratings on Australia reflect Standard & Poor\'s view of the country\'s ample fiscal and monetary policy flexibility, economic resilience, public policy stability and its sound financial sector, \" credit analyst Kyran Curry said in the statement. \"We believe these factors demonstrate Australia\'s strong ability to absorb large economic and financial shocks, such as the global recession in 2009,\" he said. \"These strengths are moderated by Australia\'s high reliance on external savings and commodity income to fund growth, its high household debt, and emerging fiscal pressures associated with an aging population.\" S&P said the Australian economy performed relatively well in the year ended June 30, 2011, as mining exports and private investment in mining and liquefied natural gas offset temporary economic weakness associated with natural weather disasters. \"We believe the economy has favorable prospects for sustained growth while there remains strong demand for commodities from emerging Asia, particularly China,\" the rating agency said in the statement. \"Australia has what we consider to be strains on its financial sector, compared to other highly rated sovereigns, reflecting its heavy external borrowings to partly fund investment in its mining sector,\" Curry added. S&P believes the high debt burden will constrain growth in domestic consumption over the next three years as the government withdraws fiscal stimuli. \"We predict that the robust outlook for commodity prices, allied with a strong pipeline of mining investment, will underpin a return to trend growth of 3.5 percent by 2013,\" the rating agency said.