Rolle stresses Matthew’s impact following Moody’s deficit projection
On the heels of Moody’s widening its projection for The Bahamas’ deficit to almost $300 million, Minister of State for Investments Khaalis Rolle lamented the adverse economic impact of Hurricane Matthew.
The international credit ratings giant recently increased its 2016/2017 fiscal deficit projection for The Bahamas to 3.6 percent of gross domestic product (GDP) in light of Hurricane Matthew.
When asked if Moody’s might consider a further downgrade to “junk status” in their next assessment, Rolle said he could not say.
“There are many variables that go into that decision,” Rolle told Guardian Business yesterday.
True to its words, Moody’s downgraded The Bahamas’ sovereign credit rating from Baa2 to Baa3 in August following a review initiated in July.
Its next review is said to be sometime in the first six months of next year.
Rolle acknowledged that the government’s spending went up, and revenue declined as a result of the category four storm and the exigency order that followed.
The Central Bank’s Monthly Economic and Financial Developments report for October 2016 points out that the deficit increased for the first three months of the fiscal year as a result of an increase in government spending outpacing revenue for that period.
“We went through a very catastrophic event that countries like The Bahamas would go through periodically. The downside of that always is there is a cost associated with rebuilding the country, whether it’s the cleanup aspect or the rebuilding of infrastructure.
“The country is at a standstill for a period so you don’t have cruise ships coming in or airplanes, and the hotels are relatively empty because people are trying to get out as quickly as possible.”