Australia’s Fiscal Outlook weakened due to falling commodity prices – FITCH

FXStreet (Mumbai) - Rating Agency Fitch, in its Mid-Year Economic and Fiscal Outlook (MYEFO), said Ausatrlia’s fiscal outlook has weakened due to lack of support for spending cuts in the Senate and a sharp decline in key commodity prices that eroded the country's terms of trade in the second half of 2014.

The rating agency cites higher spending and lower tax revenues resulted from weaker-than-expected wage growth and a marked decline in the price of major export commodities, including iron ore and coal as the main reasons for the weakening of fiscal outlook.

However, the rating agency maintains, the country is still well positioned relative to other 'AAA' rated sovereigns due to its low general government debt ratio and government commitment to fiscal consolidation.