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Halkitis: S&P report confirms country on strong fiscal course

Credit rating agency Standard and Poor’s (S&P) affirmation of The Bahamas’ sovereign credit rating has raised confidence in the country’s economic future both locally and internationally, Minister of Economic Affairs Michael Halkitis said yesterday, adding that he expects the economic recovery to continue the strong course it is on.

He was answering questions from reporters outside of Cabinet on the outlook for this country’s economy given the economic headwinds forecast globally.

He touted the S&P’s outlook for The Bahamas as validating the country’s profile, as it has been assessed in several recent government reports on the fiscal state of the country.

The S&P kept The Bahamas’ credit rating at B+ and its outlook as stable in its latest credit opinion report issued two weeks ago. The stable outlook supposes no adverse impact on the country, especially from the recent collapse of locally headquartered cryptocurrency exchange FTX Digital Markets.

“The local economy benefited from the activities of a digital exchange over the past year, however, this sector may face setbacks as FTX, a digital asset exchange headquartered in The Bahamas, recently filed for bankruptcy,” noted the report.

Halkitis said the strong growth in The Bahamas’ economy, related to growth in tourism activity, is being manifested in the fiscal results of the country.

“You’ve seen the reports come out, deficits are down. We expect that trend to continue,” said Halkitis.

“So far indications are the recovery will continue very strong. We were very encouraged by the recent affirmation of  the sovereign credit rating of The Bahamas. I think that has injected an element of confidence locally and internationally, and we see that reverberating throughout the economy, including the financial markets.”

The S&P also explained in its report that this country’s real gross domestic product growth will slow next year to 1.1 percent.

“The pandemic, low historical growth, and repeated natural disasters have weighed on the country’s economy,” S&P said.

“Despite good growth over the next two to three years, our assessment of the sovereign’s creditworthiness reflects its below-average, long-term growth performance compared with that of others at a similar level of development.”