Short term, there will be no real impact to importers and exporters from the Budget.
And longer term the government’s spending on domestic infrastructure will help many industries associated directly and indirectly with those projects, says David Greene, Business Development Director at AFEX.
Mr Greene says dark clouds were looming over Australia’s AAA credit rating in the lead-up to the Budget.
“The concern will always be around how any expansion in the accounts would impact ratings agencies view of Australia,” he said.
But the budget differentiated between debt incurred to fund recurrent expenses and that for capital expenditure to avoid any major impact.
The AUD/USD found support in the Budget aftermath trading at 0.73c.
Economy to remain steadfast
“How much of this support was as a direct result of the Budget remains unknown,” said Mr Greene.
“What is clear though is that the federal government expects the economy to remain steadfast and importantly grow – so much so that it is banking on it.
“From a currency perspective, losing the AAA credit rating will see the AUD tumble – benefiting exporters.
“However, this will be at a far greater cost to the economy from a funding point of view.”
AFEX is a global company offering financial and risk management solutions for importers and exporters.