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Wright: With weak economy, Moody’s rating review not unexpected

Inter-American Development Bank (IDB) Country Economist Dr. Allan Wright said Moody’s announcement to place The Bahamas’ sovereign credit rating on review was not “unexpected” based on the country’s current fiscal state.

Moody’s visited The Bahamas last week to conduct a review of the country’s economic performance and is expected to publish its results shortly.

Leading up to the visit, Moody’s review was prompted by a weaker than expected fiscal position and the expected worsening of the government’s debt ratios.

Wright told Guardian Business in a recent interview that, “This is not unexpected, as the government has reported tepid economic performance from declining productivity levels and weakening fiscal and debt positions.

“The [government’s] efforts to strengthen public financial management, which are supported by an IDB loan, aim at addressing the objective of achieving greater fiscal space.”

During the recent budget communication in May, Turnquest revealed that the projected GFS (government finance statistics) deficit of $100 million under the former government was expected to land at $500 million at the end of June.

Turnquest also said the Free National Movement (FNM) government would work towards reducing and eliminating the GFS deficit.

To do this, the finance minister said the government would work with the IDB-funded public financial management project along with bringing more transparency and accountability to fiscal operations.

Turnquest also told Guardian Business last week the government is “hopeful” that the country’s credit rating would be maintained. His comments came shortly after Moody’s visit came to an end last week.

When asked about any indications of a downgrade, Turnquest said, “We don’t control the narrative.”

 

 

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