The Tribune

By SANCHESKA BROWN

Tribune Staff Reporter

sbrown@tribunemedia.net

FREE National Movement Leader Dr Hubert Minnis weighed in yesterday on the Moody’s downgrade threat, saying this is “not the first time” an international rating agency has warned the government about its “reckless spending”. He said if the Christie administration remains in power “it will not be the last”.

In a statement, Dr Minnis said the Bahamian people deserve a government that will lead it to a more prosperous future, rather than one that continues to run it into the ground.

His comments come days after Moody’s announced it was placing the country “on review” for a potential downgrade, due to both its unexpected economic contraction and further deterioration in the government’s fiscal position.

Moody’s pointed out last Friday that “debt accumulation” has continued to increase, with the government consistently failing to hit its budget projections, and the adequacy and effectiveness of its policy responses to The Bahamas’ problems.

Moody’s warned that any potential downgrade could be “by one notch or more.” The country currently has a ‘Baa2’ rating, two notches away from being cut to so-called “junk” status – a position where it will lose its existing investment grade status.

“This is not the first time that the international rating agencies have warned the PLP government that its reckless spending would push the country’s financial situation over the proverbial fiscal cliff. In March, this government was told to rein in its spending during the remaining months of the 2015-2016 fiscal year but they continued to spend like a drunken sailor,” Dr Minnis said.

“Yet to hear the prime minister tell it, everything is fine because he claims his government has reined in spending. What he did not tell the people is all of the ‘savings’ comes on the backs of hard-working Bahamians through the PLP’s higher taxes and fees. Even with tax increases and higher fees they keep spending and putting The Bahamas financial standing at risk.

“But unfortunately for the people of The Bahamas this is nothing new. Year after year the PLP has failed to make significant, structural improvements in our budgeting and our economy keeps getting worse and worse. This is especially true for the Bahamian people but not for the PLP select few.”

Dr Minnis said the country’s outlook will not improve until “we have real leadership that shines a light on corruption and delivers real transparency”.

“Leadership that will root out the crime that is infecting our communities, and leadership that will do the hard work to get our economy growing again,” Dr Minnis said.

“The Bahamian people deserve a government that will lead it to a more prosperous future, rather than a government that continues to run it into the ground. The FNM will provide real leadership for the Bahamian people that they desperately need and ought to have.”

On Monday, State Minister for Finance Michael Halkitis said the government will meet with representatives from ratings agencies Standard & Poor’s and Moody’s starting next week in order to “convince” the firms not to downgrade the country’s credit rating.

Mr Halkitis told The Tribune that while Moody’s seems to be “leaning in one direction”, the government will “plead its case” in hopes that the Wall Street ratings agency will see the government’s positive future prospects for the economy.