Standard & Poor’s Ratings Services has revised its rating outlook on New South Wales to stable from negative.
The state’s AAA/A-1+ rating was confirmed.
The move, and the agency’s approval of NSW’s stronger financial management, will be a positive for the Liberal government when it goes to an election in about March.
Standard & Poor’s says:
“The outlook revision reflects NSW’s stronger financial management over recent years, which we have reassessed to be very strong from strong. This improved financial management, along with higher revenue growth, has boosted the state’s financial performance. With these developments, we now consider the risk that the government will allow debt levels to exceed 120% of revenues over the forecast period is low, notwithstanding the state’s ongoing infrastructure needs.
The ratings agency says the state has been cutting spending in recent budgets to better align spending growth with slower revenue growth.
A strengthening local economy is also lifting the state’s revenue growth.
The state’s GDP per capita was US$65,000 in fiscal 2013 and the outlook for the NSW economy has improved.
Standard & Poor’s says stronger financial management and an improving revenue base both contribute to a lower forecast for the state’s debt than previously.
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