The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

MOODY’S decision not to downgrade the country’s credit rating “is clear and unambiguous evidence of the unmistakable confidence in the economic policies of the Minnis administration,” Free National Movement Chairman Sidney Collie said yesterday.

Although Moody’s changed the country’s credit outlook from stable to negative, its confirmation of its Baa3 rating appears to be one of the first significant victories for the new administration, as a downgrade would have been costly for The Bahamas.

The confirmation of the credit rating “also demonstrates that (the) significant steps that the administration has taken in three short months are gradually returning the economy of The Bahamas to sound financial footing,” the FNM said.

“After five years of disastrous PLP mismanagement, fraud, a series of downgrades, and the consequential economic turmoil, this country was left not only with a crisis of confidence but also with major economic structural challenges,” the party added.

“The PLP and its naysayers are now forced to accept that Prime Minister Minnis, Deputy Prime Minister and Minister of Finance Peter Turnquest and his Cabinet colleagues have indeed been working day and night around the clock since taking over the reins of government to demonstrate to Moody’s and others, that this administration will leave no stones unturned by taking the necessary actions to get the economy and the country out of the fiscal crisis left by the PLP.”

It has been previously reported that Moody’s cited the potential for “debt stabilisation” because of the government’s fiscal consolidation programme as a reason for its decision.

It also considered that the country’s credit metrics “remain in line with Baa3 peers” and the government’s liquidity risk “remains contained”.

The negative outlook, however, “reflects potential downside risks to the fiscal consolidation process posed by weaker-than-expected growth, exposure to climate-related shocks in the form of hurricanes, and implementation risks associated with measures to rein in expenditure growth and enhance revenues,” the agency said. “Absent successful fiscal consolidation, The Bahamas’ fiscal and credit profile would likely weaken.”

Last year, Standard & Poor’s downgraded this country’s credit rating to junk status.

After Moody’s initiated a review of this country’s credit rating following the Minnis administration’s revelations about the government’s fiscal condition during the budget debate earlier this year, experts predicted it would be a huge challenge for the country to avoid another downgrade.