The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

Prime Minister Philip Davis acknowledged Standard & Poor’s (S&P) ‘B+’ long-term credit rating with a “stable” outlook while “recognising there is much work yet to be done”.

Mr Davis said his administration is not “kicking the can down the road” and is taking a proactive approach to solve some of the country’s long-standing issues.

He noted that the country is currently undergoing an energy reform and his administration is “challenging” the Grand Bahama Port Authority to live up to the terms of the Hawksbill Creek Agreement wile investing in the country’s infrastructure and people.

“We know there’s a lot more work ahead,” said Mr Davis.

“A global inflation crisis has hit our Bahamian families hard. There aren’t any easy answers or quick fixes – so we’re taking on our country’s toughest problems.

“Problems that were decades in the making don’t vanish overnight. Taking on the big fights and challenging the status quo requires a willingness to push forward where others decided to give up. Some of these policies and investments in change will pay dividends soon; others will take time. But the important thing is that we’re no longer kicking the can down the road – and as a result, our country is finally moving in the right direction.”

S&P, in its analysis released late last week, projected that Bahamian economic output, or gross domestic product (GDP), will grow by 1.8 percent in 2024. That rate is some 0.5 percentage points below the 2.3 percent projected by the International Monetary Fund (IMF) in its most recent Article IV consultation and the Bahamian Central Bank, which is predicting similar growth above 2 percent.

The report contained several positives in that it maintained The Bahamas’ present ‘B+’ long-term credit rating together with a “stable” outlook, the latter of which signals that S&P is unlikely to further downgrade this nation’s creditworthiness within the next 12 months. It also gave credit for a “robust recovery” post-COVID and the Government’s fiscal consolidation efforts, which have slashed the deficit and contained debt.

But, on the negative side, S&P hinted that failing to rebuild fiscal headroom more quickly means The Bahamas remains highly exposed to hurricanes and other external shocks. “We think the country’s record of slow progress in reforming public finances and key economic sectors led to a weakening of its financial profile,” the credit rating agency added.

Michael Halkitis, minister of economic affairs, in a brief reply to Tribune Business inquiries, said of the S&P report: “We are very encouraged, but we understand there is more work to be done.” 

Kwasi Thompson, Opposition finance spokesman, asserted S&P “did not adjust the economic outlook upward and, instead, the report tells a somewhat bleak story of the economic trajectory of The Bahamas”.

In response, Mr Davis said it is “disappointing” that the Opposition appears to be “rooting for bad news” and he will not allow “bad-faith criticism” to hinder the country’s progress.

“It has been disappointing to see the Opposition so determined to ignore our country’s progress, instead of celebrating it,” said Mr Davis.

“They almost appear to be rooting for bad news. But we know Bahamians across our islands are working hard to build a stronger and more inclusive economy; none of us are going to let any bad-faith criticism slow us down.”

Other observers, speaking on condition of anonymity, said the S&P report was describing a Bahamas that is “treading water, not moving forward or back”. 

One added: “The way I read this is that if they don’t put forward a credible plan, absent that you’re going to continue to see this kind of sluggishness.”