Ministerial Statement by the Premier and Minister of Finance, The Hon. David Burt, JP, MP
Mr. Speaker, I rise today to advise Honourable Members of the recent rating action taken by Standard and Poor’s on the Bermuda credit.
Mr. Speaker, I am pleased to advise Honourable Members that on April 25th 2018, ratings agency Standard and Poor’s (S&P’s) revised its outlook on Bermuda to positive. S&P’s Global Ratings also affirmed Bermuda’s A+ long-term sovereign credit and senior unsecured debt ratings as well as its A-1 short-term ratings and its AA+ transfer and convertibility assessment.
Mr. Speaker, many statistics are used by credit rating agencies during their sovereign credit analysis. In addition to statistics, rating agencies also look at a number of structural/qualitative factors such as institutional effectiveness and political risks; economic structure and growth prospects; external liquidity and international investment positions; fiscal performance and flexibility, as well as debt burden and funding and monetary flexibility.
As part of their rating methodology they conduct annual visits to the island and meet with various public and private sector representatives to gain a better understanding of the sovereign being rated.
The headline of the report read as follows:
“Bermuda Outlook Revised to Positive From Stable On Prospect of Sustained Economic Growth And Improved Fiscal Outcomes”
Mr. Speaker here are a few of the highlights:
- Bermuda’s credit story is improving thanks to a return to positive real economic growth in 2017 and 2018.
- We also view the continuation of prudent fiscal policy by the new Progressive Labor Party government as positive.
- The positive outlook reflects our expectations that, in the next 12-to-24 months, real GDP growth will remain moderately positive, fiscal deficits will continue to narrow approaching balance and Bermuda’s net general government creditor positon will improve modestly.
Mr. Speaker, this reinforcement of our credit rating is important as it supports lower interest payments, and stimulates greater consumer and investor confidence. The general public should accept the outcome of this report as an independent, objective endorsement of our fiscal and economic policies and it is gratifying to note that S&P’s have noticed the progress this government has made in the short period we have been in office.
Mr. Speaker, I can advise Honourable Members that Moody’s Investors Service visited the island this week for their annual review and their report will be published within a month.
In closing I would like to advise Honourable Members that the Government is very pleased with this rating actions by Standard & Poor’s and will continue to collaboratively press ahead with our economic and fiscal policies in order to establish a better and fairer Bermuda that was promised in our election platform.
As the Premier and Minister of Finance, I remain committed to creating an economy that works for all Bermudians and continuing our fiscal consolidation efforts.
Thank you Mr. Speaker.