Credit rating agency Standard & Poor's yesterday affirmed The Bahamas' sovereign credit rating while continuing to ascribe a "negative" long-term outlook due to the "challenges of turning around the fiscal accounts".
The Bahamas' sovereign credit rating was affirmed as triple-B/A-2, a rating which S&P said reflects the "generally prudent policies" being implemented by the government - likely to be a boost to the government as it comes under fire from many corners of the business community over the planned implementation of value added tax in July 2014 and other cost-of-doing-business increases.
The affirmation of the BBB/A-2 rating means The Bahamas will not have to pay more in interest servicing costs for foreign debt held.
The Bahamas first saw its outlook slashed to "negative" in September 2012, as S&P noted that the government's financial position had continued to weaken.
The latest assessment suggests that the ratings agency does not see the possibility of a significant turnaround in this economy's fortunes in the near future, something largely reflected in the observations made by those throughout the private sector at this time, despite some hope that hiring associated with Baha Mar could lift the economy starting next year.
In a statement released in the wake of the announcement, the Ministry of Finance said the position taken by the international credit rating agency supports the government's efforts to undertake fiscal reforms and to "boost investor confidence".
"The ratings affirm an unchanged outlook for The Bahamas. This underscores the importance of continuing with credible reforms to improve the health of public finances, and to begin to reduce the public debt burden over the next few years.
"S&P acknowledges the success that the Government has had in curbing spending during the last fiscal year.
"The Ministry of Finance agrees with the rating agency's view that expenditure discipline has to be maintained over the coming years, and that this must complement a medium-term strategy to improve revenue collections.
"The broad package of revenue and expenditure reforms and a concerted focus on boosting investor confidence in the medium-term stability of the Bahamian economy is vital to sustaining growth creating employment," the ministry added.

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