Bahamas Financial Outlook Downgraded to Negative

Wall Street dealt yet another blow to The Bahamas on Monday by revising the country’s financial outlook from stable to negative, insisting that the Government’s fiscal profile continues to weaken.

In the latest report from Standard & Poor’s (S&P), the international credit rating agency issued a warning that a downgrade could occur if the Progressive Liberal Party (PLP) administration fails to craft a medium-term plan, to reign in the country’s rising debt.

For now, S&P affirmed its “BBB/A-2” sovereign credit rating and “BBB+” transfer and convertibility assessment on The Bahamas.

The report stated that instead of peaking and starting to decline, the government deficit rose even further in the fiscal year ended June 2012.

Capital expenditure cost overruns (especially on the New Providence roads project) and continued sluggish growth in recurrent revenue, pushed the general government deficit to an estimated more than 7 percent of GDP.

© 2012 SAT Telecommunications Ltd.

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