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Govt: Moody's Decision No Surprise Given Strain Of Pandemic

Deputy Prime Minister Peter Turnquest.

Deputy Prime Minister Peter Turnquest.

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

The Government today said Moody’s decision to place The Bahamas’ credit rating on downgrade review was “unfortunate but not surprising” given the “strain” imposed by the COVID-19 pandemic.

Responding to the credit rating agency’s warning that The Bahamas’ sovereign creditworthiness could be downgraded to so-called “junk” status, the Ministry of Finance said in a statement that this nation was far from alone in being subjected to such scrutiny.

It added that the inevitable economic and fiscal fall-out was threatening the credit ratings for multiple countries and multinationals, some of which have already been downgraded.

“The Ministry of Finance acknowledges the decision by Moody’s to place The Bahamas’ ‘Baa3’ ratings on review for downgrade given the extreme strain placed on the recovering Bahamian economy by the spread of the coronavirus outbreak,” the ministry said.

“This comes at a time when the entire world is going through economic turmoil. No country is being spared by the unprecedented public health and economic crisis.

“The timing of the Moody’s review is unfortunate, but the announcement is not surprising due to the economic shock of COVID-19 on the global economy. Large and small countries alike, and multinationals, are facing predictable reviews. In fact, in late March, ratings agency Fitch downgraded the United Kingdom’s sovereign rating.”

K Peter Turnquest, deputy prime minister and minister of finance, pledged that the Government will balance providing economic and social assistance to Bahamians in need with the long-term goal of achieving fiscal sustainability.

“The Government is always mindful to secure the long-term fiscal stability of the country, mitigating any risks to our secure and prosperous future. During this crisis we will continue to conduct the nation’s fiscal affairs in a manner that is responsible,” Mr Turnquest said.

“At the same time we have demonstrated with our response to Hurricane Dorian, and our initial response to the COVID-19 economic fall-out, that we will take aggressive actions in the short-term to protect the social and economic welfare of the Bahamian people.

“We will reprioritise and allocate sufficient resources to ensure the Bahamian people are supported through these uncertain times.”

The Ministry of Finance acknowledged that revenue losses, and increased business support and benefits spending, will impose pressure on the revised $677.5m fiscal deficit target for the 2019-2020 budget year.

The COVID-19 pandemic has also forced it to rapidly reassess, and beginning making adjustments to, its 2020-2021 fiscal year preparations given that ongoing revenue and fiscal pressures will likely spill over into the new budget year.

“The expected fall-off in government revenue, and inevitable decline in GDP from the global economic crisis and domestic economic shutdown, will likely linger into the new fiscal and calendar year,” the Ministry of Finance added.

“These realities mean the Government is reviewing is fiscal targets once again with a view towards revising them as part of the new budget cycle.”

Mr Turnquest added: “Despite the challenging times ahead and the need for significant fiscal adjustments, the Government has demonstrated by its track record and strong commitment to fiscal responsibility, its ability to overcome economic hardship, restore fiscal stability, and to drive economic growth even in difficult circumstances.”

Comments

The_Oracle 3 months ago

What is the point, at this point, who on earth could they possibly upgrade?

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TalRussell 3 months ago

WHILST OTHER DEVELOPED COLONY'S ARE EMPTYING JAIL CELLS THOSE NOT POSING A THREAT SOCIETY: we elected officials sees prison as as a potential new Homeless" revenue stream?
The one thing neither comrades KP, the PM, nor AG Carl Wilshire QC wants anyone talk about is,
it's going become much difficult remain sheltered-at-home as the numbers PopoulacesOrdinay are being forced into joining ranks the Homeless.
None this points to a positive to prevent the sudden devaluation colony's dollar -
including the increased revenue to be generated from Fines levied against an increased number new forced into Homeless curfew offenders...and jailing those unable pay fines FOR LONG LIST OFFENSES.** Nod once for yeah, twice for no?

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Well_mudda_take_sic 3 months ago

Ominous silence about the current state of our foreign currency reserves. Not good!

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TalRussell 3 months ago

NO colony lives were lost from the 9/11 terrorist attacks.This time if we could be talking 1,400 dead - how do the comrade 400,000 PopoulacesOrdinay, return back from not suffering severely physiological damage to the same colony as before.
How to even begin to imagine the added physiological effect it will have on our post Hurricane Dorian Abacoians and Grand Bahamalanders - and 3 years post Hurricane Irma, Ragged Islanders, certainly not to be levying $500 - $1,500 stiff court fines to broke in pockets curfew and no masks wearing violators. Nod once for yeah, twice for no?

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DDK 3 months ago

Hard times ahead. I think this is only the tip of the iceberg..........

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ThisIsOurs 3 months ago

what happens if the people who using chewing gum and rope to keep the power on at BEC get sick? Same for water and sewerage. We could be in caveman times... hopefully one of those experimental drugs comes through and doesn't cause babies with extra limbs

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Well_mudda_take_sic 3 months ago

We aren't going to have nearly enough doctors, nurses and hospital beds to handle the very significant concentration of baby births 9 months from now.

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Well_mudda_take_sic 3 months ago

The people of a country are subject to physical death at some point in their lives. That's just a given. But their country itself is also vulnerable to fiscal death from sudden economic shocks at anytime. And the people never fare well when their country has died. That's just another given.

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Porcupine 3 months ago

The difference being that a country is a figment of our imaginations. Just like an economy, or a religion. We seem unable to see life, as in ourselves and in the nurturing world around us, in it's eminent whole. It seems as if we have come to believe that we are greater than these forces. Is our made up well-being synonymous with the well-being of life? Not at all. Even in these times, we still seem unable to grasp our fragility. We still celebrate our individual wealth, as opposed to the wealth of our nation. We, here and abroad, are untutored, except in making money for ourselves. True leaders are nowhere to be found. Why? We continue to choose psychopaths as our representatives. True leaders, who have the goodwill of all as their agenda, cannot get a word in edgewise for the vast majority of the TV watching human populace. We are no different here.

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