While pleased to see that international credit agency Moody’s changed the Bahamas’ economic outlook from negative to stable, Shadow Minister of Finance Chester Cooper urged the government to focus less on international reports and more on economic growth that will manifest “real impact” for the Bahamian people.
“Pretty books and lukewarm report cards from credit agencies will do nothing to stem the increase of joblessness and the erosion of domestic credit now being experienced,” said Cooper in a statement on Saturday.
“The reality on the ground is being ignored by this administration as it apparently governs to please the ratings agencies and the IMF (International Monetary Fund).”
Although Moody’s changed the Bahamas’ economic outlook, it left the country’s Baa3 credit rating unchanged.
“The change in outlook to stable reflects Moody’s view that The Bahamas has made important progress in strengthening its fiscal policy framework and transparency through the introduction of fiscal rules and more frequent and in-depth reporting of the fiscal accounts,” Moody’s said in a statement last Thursday.
“Additionally, Moody’s considers that continued fiscal consolidation will support the stabilization of government debt metrics.”
However, Cooper noted that it is unfortunate that Moody’s has yet to change the country’s credit rating from the “junk” status it was placed in several years ago, calling Moody’s reasons for the downgrade “questionable”.
In Moody’s previous report in August last year, The Bahamas’ Baa3 rating remained unchanged as well.
Cooper said with Baha Mar now open and The Bahamas being spared a hurricane last year, he would expect the credit rating to improve.
In a statement last week, Deputy Prime Minister and Minister of Finance Peter Turnquest said he is encouraged by the opinion published by Moody’s.
He noted that the results are a clear sign that the government’s strategies are strengthening the country’s economy.
But Cooper warned the government against crowing about reports from international organizations.
“We stand blacklisted by the EU (European Union) and remain under constant threat by the OECD (Organisation for Economic Co-operation and Development) and the FATF (Financial Action Task Force),” he said.
“The government has also done little to address the misery of thousands of Bahamian families as it applied massive tax increases and higher utility bills on the public.”
He continued, “The government should take the view of the ratings agencies for whatever it’s worth, but meaningfully attempt to extract less from a population who cannot afford it, and focus on economic growth that will have a real impact on people’s lives.”