Australia faces challenges in curbing spending: Moody's

[SYDNEY] Moody's said on Thursday Australia will face challenges in achieving fiscal consolidation outlined in its 2016-17 budget due to subdued nominal economic growth and sizeable spending obligations.

Responding to the annual budget released earlier this week by the Liberal National government of Malcolm Turnbull, the ratings agency said the successive revisions by governments towards more persistent deficits in recent years highlight the difficulties in curbing spending.

"We expect the government's debt burden to rise somewhat, constraining fiscal space to buffer potential negative economic shocks," said Marie Diron, a senior vice president at Moody's.

The agency did not comment on its triple-A ratings assigned to Australia.

Australia is one of just 10 countries rated triple-A with a stable outlook from all three major ratings agencies.

REUTERS