The Tribune

BY NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

State Finance Minister Michael Halkitis said yesterday the Government is “relieved” that credit ratings agency Moody’s had decided to only downgrade The Bahamas’ rating by a single notch, from Baa2 to Baa3, noting that economic developments over the next 12-18 months should improve the nation’s outlook.

“In all the circumstances we are relieved that we only went down one notch.

“It’s important because we maintain our investment grade. The second important aspect of this is we get a stable rating which means that for the next 18-24 months we should maintain this rating barring any unforeseen circumstances,” said Mr Halkitis.

The Ministry of Finance had said in a statement Tuesday that, although the Government is disappointed in Moody’s decision, the country’s credit risk remains investment grade, and that the rating agency, by its stable outlook assessment, “acknowledges that the economic developments underway stand to enhance the resilience of the Bahamian economy”.

“Traditionally you have 18 months to two years before they do a review barring any sort  of calamitous event and so what that means is that within that time you would have a Baha Mar remobilised, hopefully reopened and some of the other investment projects up and running, creating employment and contributing to the economy,” Mr Halkitis said.

The international credit rating agency maintained the Bahamas’ ‘investment grade’ status at the lowest possible level, downgrading its creditworthiness by one notch - from ‘Baa2’ to ‘Baa3’ - but that was as bad as it got for the Government.

This implies that the Bahamas faces no prospect of a further Moody’s downgrade in the short to medium term, with the rating agency saying it expected both the $6.778 billion national debt and economic growth to “stabilise” within the next two years.