Moody's Praises The Cayman Island's Prudent Economic Policies

by Amanda Banks, Tax-News.com, London

29 September 2003

Ratings agency Moody's Investor Services has issued its annual report on the Cayman Islands which has attributed the nation's Aa3 rating to its resilient tourist sector, high per capita income and prudent economic policy framework.

Moody's noted the cooperative response of the Caymanian authorities with regard to US and EU concerns on money laundering through its offshore banking sector and the ratings agency also reported a similarly satisfactory result in response to the OECD initiatives on tax issues.

The report also observed the Caribbean jurisdiction's strong and flexible regulatory framework, stable political system, favourable social indicators and an encouraging external debt situation.

"Although tourism has yet to fully recover from the fall-off that followed the Sept. 11, 2001 terrorist attacks on the US, the Cayman Islands' large and diverse offshore financial services industry remains robust," Moody's sovereign analyst Thomas J. Byrne, author of the report observed.

Meanwhile, the constraining factor facing the Cayman Islands, comments Mr Byrne, is its over-reliance on the tourism sector and external sources for economic growth. He also noted the territory's limited debt servicing capabilities.

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