Friday, November 13, 2020

DOWNGRADE: Bahamian economy projected to contract by 21 percent

Deputy Prime Minister and Minister of Finance K. Peter Turnquest

Natario McKenzie
Eyewitness News

NASSAU, BAHAMAS — An American credit rating agency yesterday pushed the country’s credit rating further into junk territory as it now expects the Bahamian economy to contract by 21 percent this year.

S&P Global Ratings, formerly Standard & Poor’s, lowered the country’s credit rating one notch to BB- from BB due to weaker than expected economic and financial conditions as a result of COVID-19.

“The country’s fiscal reform measures have evolved slowly, and we expect the pandemic will hinder meaningful public finance reform, while large fiscal deficits and a high debt burden increase funding pressures,” S&P said in a statement.

The credit rating agency had lowered this nation’s credit rating to junk status in April, with its latest action pushing the country’s credit rating down further.

S&P said it now expects the economy to show a contraction of 21 percent in 2020 with a gradual recovery starting in 2021, although it will take several years to reach pre-pandemic levels of activity.

S&P noted that it believes there is a one in three chance the rating could be lowered over the next year if the economic recovery in 2021 is weaker or more prolonged than expected.  Read more >>