No impact from quake on NZ's rating: Moody's
Moody's is monitoring the economic fallout from yesterday's Christchurch earthquake but currently sees no risk to New Zealand's Aaa rating.
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The effect on the Government's finances from the Christchurch earthquake is being monitored by Moody's Investors Service but the credit rating company sees no reason to change the country's Aaa rating at the moment.
Tuesday's earthquake would have a larger effect on government borrowing than the one in September, and debt ratios would deteriorate further, but would remain in line with Aaa-rated peers, Moody's said.
New Zealand's ability to support higher government debt was somewhat lower than in other countries, given the country's relative lack of economic diversity and reliance on external funding. But its debt metrics would not become incompatible with the country's rating level.
The budget in May would provide more information on the impact of the earthquake.
"Moody's notes that the rise in government debt resulting from last September's earthquake -- and which will come to about 1 percent of gross domestic product -- has meant that the peak level of debt projected for the mid-part of this decade is correspondingly higher," said Steven Hess, a senior credit officer at the credit rating company.
"However, we also note that, even with this higher projected level of debt, New Zealand government debt levels are well below the median for Aaa-rated governments globally," Mr Hess said.
NBR staff and NZPA
Wed, 23 Feb 2011
Wed, 23 Feb 2011
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No impact from quake on NZ's rating: Moody's
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