xysoom
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| Posted: 25 July 2020 at 11:09 | IP Logged
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Canada‘s AAA Rating Confirmed By S&P On ’Ample Fiscal
Room
Canada‘s AAA rating and stable outlook has been
confirmed by S&P Global Ratings, which cited the
country’s “ample” fiscal and monetary buffer and its
diversified economy.To get more news about
WikiFX, you can visit wikifx news official website.
“Canadas public finances were well positioned
entering the pandemic to enable a strong policy response
to contain its negative impact without weakening
sovereign creditworthiness,” S&P analysts including
Julia L Smith wrote in a note Wednesday.
S&P‘s rating is based partly on the expectation of
an economic rebound that will shrink the country’s
fiscal gap. The federal governments deficit may approach
16% of economic output this fiscal year, the largest
since 1945, while the economy is on path to shrink 6.8%
in 2020, the biggest drop in almost a century, according
to government estimates released July 8.
“We expect the Canadian economy to recover in 2021,
which will partially compensate for the loss of output
this year, and continued GDP growth thereafter,” S&P
analysts said. “This recovery will lead to an
improvement in the governments deficit in 2021.”
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wikifx_articlepic">
Read more: Canadas AAA Rating Reflects Fiscal,
Monetary Flexibility: S&P
Canada and Germany are the only members of the Group
of Seven retaining their AAA ratings with S&P. Moodys
Investors Service also awards Canada its highest rating,
while Fitch Ratings downgraded Canada in June, citing the
deterioration in its public finances from the pandemic.
“We could lower the ratings over the next two years
should the deterioration in the government‘s fiscal
position become more severe and prolonged than we
currently anticipate,” S&P said. “We could also lower
the rating should a deteriorated fiscal position be
accompanied by a substantial weakening in Canada’s net
external position beyond our current expectations.”
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Topic: Canada‘s AAA Rating Confirmed By S&P On ’
