Mr. Speaker, as emphasized in the 2016/17 Budget Statement, the Bermuda Government lives off credit, therefore, it is essential that we conduct our financial affairs in such a manner that is acceptable to our lenders.
The perceptions of the lenders to Bermuda, as a credit risk, are strongly influenced by the analysis and conclusions of the major credit rating agencies: in Bermuda’s case, Standard & Poors and Moody’s.
On February 8, 2016, Moody’s issued a credit report on Bermuda which reflected mainly on the fiscal performance released by the Government for the first three quarters for is fiscal year 2015/16.
The headline of the report read as follows: “Bermuda’s Fiscal Consolidation Efforts Bear Fruit, a Credit Positive.”
Mr. Speaker here is a few of the highlights:
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“The government’s success in reducing the budget deficit reflects its increased efforts to maintain fiscal discipline and a moderate economic rebound that took hold in 2015 following a six year recession.”
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“As a result, the deficit should narrow to about $220 million, or 3.8% of GDP in fiscal 2015. The resulting drop in the fiscal deficit may exceed 1.5percentage points, making it the most significant fiscal consolidation for Bermuda in more than 20 years.”
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“Growth over the next few years will be supported by higher infrastructure investment in the tourism sector, as well as improvements to Bermuda’s only airport ahead of the America’s Cup race in 2017.”
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“The latest labor statistics also suggest that the international business sector has resumed growth. Sustained growth in that sector in addition to infrastructure investment will likely create new jobs, supporting growth in average wages in the economy and payroll tax receipts for the government.”
It should be noted that this report was written before the 2016/17 budget was unveiled last Friday.
Mr. Speaker, it is gratifying to note that important, unbiased, expert analysts have noticed the progress this government has made in repairing the broken government finances and the economy as a whole we inherited from the former administration. Thank you Mr. Speaker.