NASSAU –– Prime Minister Perry Christie criticized international credit ratings agency Standard & Poor’s yesterday for its “pessimistic”, “downbeat” assessment of the Bahamas’ economy, while insisting his administration had a clear vision of the policy framework needed to redress public finances.
He said this made him confident that this country was on the cusp of economic growth.
Christie, who is also minister of finance, questioned the recent downgrade from S&P, suggesting he had concerns about the agency’s credibility.
Last week, S&P downgraded the Bahamas’ credit rating due to the “economic shock” from Baha Mar’s bankruptcy filing.
The nation’s leader insisted yesterday that there should be no doubt among Bahamians that his administration remained committed to a timely resolution of the Baha Mar dispute and the resort’s completion in a manner that worked in the best interest of the country.
Baha Mar stakeholders have been engaged in a bitter court battle for weeks over the resort’s future. An American bankruptcy judge recently ordered all parties involved to keep talking ahead of a September 4 hearing in the Supreme Court about the government’s winding up petition.
Christie’s statement came after two major international credit rating agencies released assessments of the Bahamas’ economic outlook.
On Monday, Moody’s maintained its existing rating and outlook on this country’s creditworthiness.
However, last week S&P took the opposite direction when it downgraded the Bahamas with a forecast of depressed growth due to the Baha Mar deadlock and long term structural weaknesses. S&P put this country’s sovereign rating at “BBB-/A-3” from “BBB+/A-2”, just one notch above so-called “junk status”.
“Mr Speaker, let there be no doubt either in this honourable House or among the Bahamian public, that the government is firmly committed to a timely resolution of the Baha Mar matter and the completion of the project, in a manner that will serve in the best interest in our country,” he told the House of Assembly.
“Despite that S&P takes a dim view of prospects for the project and suggests that as a result, real GDP per capita in the Bahamas will barely grow at all over the next several years.
“Mr Speaker, such a downbeat assessment simply does not match up to reality. And, in fact, it also flies in the face of some of the evidence that S&P itself presents in its report.”
He continued: “It is widely known that a prime prerequisite for a solid credit rating, strong investor confidence and buoyant economic growth is a sound and sustainable public finance framework.
“The government has been working diligently over the past three years to effect critical reforms to the major components of the fiscal accounts on both the expenditure and revenue sides.”
Christie said to that end the government had been pursuing a detailed and transparent medium-term fiscal consolidation plan designed to gradually reduce and eliminate the deficit and return the debt-to-GDP ratio to lower than more desirable levels.
Christie went on to call S&P’s assessment “unfortunate” saying that it failed to fully and properly account for the government’s proactive and dynamic growth agenda in its analysis.
“The government has a clear vision of the policy framework that is requited to both redress the public finances and bolster growth and employment. We are actively and doggedly pursuing the various multi-faceted policies that comprise that framework.
“I am confident that we are on the cusp of a stronger, more prosperous and modern Bahamas for all Bahamians,” Christie said.