Bahamas Responds To Ratings Downgrade
Thursday, November 03, 2011
The Bahamas Ministry of Finance has said the recent credit rating downgrade by
Standard and Poor's can be attributed to the lacklustre state and limited diversity
of the territory's economy, but underscored reforms to reduce its deficit remains on track.
Standard and Poor's has downgraded the territory's credit rating from BBB+/A-2
to BBB/A-3 and its transfer and currency convertibility assessment from A- to
BBB+.
Rationalizing the downgrade, the Ministry said that in recent discussions with
the agency, Standard and Poor's made it clear that it was changing its methodology
to place greater emphasis on diversification and growth prospects.
“Given the Bahamas’ economic concentration on tourism and financial
services for more than 50 years and given its limited growth prospects in the
current challenging global economic environment, it seemed likely that a rating
downgrade would follow this change in methodology,” the Ministry said, adding:
“The Bahamas government remains focused on stimulating economic growth
through inward direct foreign investment, increasing support for small- and
medium-size business development, improving the domestic environment for doing
business and strengthening the productivity of The Bahamas’ workforce.”
"The government also remains focused on strategies to reverse the current fiscal
circumstances of the country by slowing the growth rate of our debt to Gross
Domestic Product ratio.” |
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