Friday, June 26, 2020

Double Dip: Covid Fallout Sees Two-Point Downgrade

Tribune Business Editor

The “extraordinary beating” inflicted upon the tourism industry by COVID-19 was critical in Moody’s decision yesterday to strip The Bahamas of its ‘investment grade’ credit rating, the deputy prime minister says.

K Peter Turnquest, responding to the rating agency’s move to slash The Bahamas’ sovereign creditworthiness by two notches to ‘Ba2’, told Tribune Business there was little the Government can do to improve this situation in the short-term given that the priority remains protecting families, businesses and the wider economy against the worst of the pandemic’s fall-out.

Pointing out that The Bahamas was far from alone in suffering downgrades as a result of COVID-19, Mr Turnquest said the Government was still predicting an economic revival will begin in late November 2020 when the Thanksgiving holiday signals the start of the winter tourism season.

He admitted, though, that this forecast could easily be derailed by the multiple “unknowns” surrounding COVID-19 - particularly the timing and strength of the US travel market rebound, given that the country accounts for 82 percent of all visitors to this nation.

“Our economy is affected more than most in that we are so tied to tourism, which has taken an extraordinary beating,” Mr Turnquest told Tribune Business.

“In the eyes of the rating agencies, that increases the risk.  Read more >>