Bahamas Responds To Negative Credit Outlook

by Amanda Banks, Tax-News.com, London

05 September 2011

The Bahamas government, welcoming the retention of the territory's AA3 bond ratings, has acknowledged the fiscal and economic challenges the country faces, as noted by Moody's credit rating agency in giving a negative outlook on the territory's creditworthiness.

In response to the negative outlook, the government has said:

“The recent global economic and financial crisis profoundly impacted the Bahamian economy and required extraordinary levels of spending on the part of the government to safeguard the financial system, boost economic activity and provide assistance to Bahamians at a time when government revenue experienced precipitous declines.”

The government said that despite "the unusually high rise in debt levels" it noted that it maintains one of the lowest debt-to-GDP ratios in the Caribbean region.

The government underscored that it is committed to a number of reforms, including ongoing efforts to pursue a fiscal policy “that reduces the debt burden and creates an optimum environment for economic growth and prosperity".

The government in particular stressed that it seeks to maintain the competitiveness of the Bahamas' financial services industry. According to the government, measures will include: the pursuit of new opportunities for the Bahamas as an international financial services centre; increased invesment promotion; expanded support for small- and medium-sized enterprises; and increasing the ease with which business is done in the Bahamas.

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