Govt: Moody’s downgrade not due to our performance
In response to the decision by Moody’s to downgrade The Bahamas’ credit rating to Ba2 and change the outlook to negative, the Ministry of Finance charged that fair-minded Bahamians know that the current state of fiscal affairs is a result of external shocks caused by Covid-19 not because of the Minnis Administration’s performance as a Government.
“The Ministry of Finance acknowledges the decision by credit rating agency Moody’s to downgrade The Bahamas’ credit rating to Ba2. As part of the ongoing assessment of the country’s fiscal and macroeconomic performance, the Ministry of Finance has been in close communication with Moody’s since April, when The Bahamas’ credit rating was placed on review for downgrade given the extreme strain placed on a yet recovered Bahamian economy by the spread of the coronavirus outbreak,” according to the statement.
“As we noted then, Moody’s decision, comes at a time when the entire world, first world countries and developing nations alike, is experiencing unprecedented economic turmoil and exacerbated fiscal challenges.”
The Ministry pointed out that The Bahamas is not alone in confronting these adverse credit rating assessments, arising from crisis altering circumstances not of the government’s making and entirely outside of it’s control.
Officials noted that Italy and India recently saw their credit ratings downgraded.
“As Moody indicates in its assessment, the decision to downgrade The Bahamas from a Baa3 to a Ba2 rating is a direct result of the economic shocks caused by the COVID-19 pandemic, amid a yet weakened economic situation caused by Hurricane Dorian.”
“Indeed, Moody’s has pointed to the Government’s significantly improved fiscal credibility and effectiveness—a direct result of our accountable, and responsible fiscal policy framework and consolidation efforts,” according to the Ministry.
Notwithstanding Moody’s rating decision, the Government said it is confident that its policy measures have appropriately focused on protecting Bahamians, stabilizing the economy, and transforming the current crisis into an opportunity for
“We are assured that our fiscal plans for the short to medium term horizon will provide the basis for achievement of a sustainable fiscal outcome and strengthen macroeconomic growth.”