Isle Of Man Finances 'Remain Strong'

by Amanda Banks, Tax-News.com, London

14 November 2011

The Isle of Man government has clarified that the recent downgrade by Standard and Poor's credit rating agency, from AAA, to AA+, is not as a result of a deterioration in the country's finances, which 'remain strong', but as a result of a change in the agency's rating methodology.

The revision has been driven by a change in how the rating agency assesses the impact of external factors and monetary flexibility on small countries such as the Isle of Man.

'This decision doesn’t mean the fundamental strength of the island’s economy or its creditworthiness has changed. The Standard and Poor’s report maintains its ‘stable’ outlook for our economy and acknowledges that the Isle of Man is characterised by a high income level, strong fiscal balance sheet and political stability,” Isle of Man Treasury Minister, Eddie Teare explained.

“The government is successfully delivering its 5-year rebalancing plan, which is on track. Last month the Treasury presented the annual government accounts which confirmed that the Isle of Man has a revenue surplus of GBP10m against a forecast of GBP100,000. At the same time our economy remains resilient with unemployment holding at around 2% and the rate of growth for the past financial year estimated to be between 4-5% of Gross Domestic Product. The move to this new method by Standard and Poor’s has similarly affected a number of other countries who have also had their ratings revised."

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