Premier and Minister of Finance, the Hon. E. David Burt, JP, MP, today announced that ratings agency Standard & Poor’s (S&P) has reaffirmed Bermuda's A+ Sovereign Credit Rating and Bermuda's A-1 short-term rating and its AA+ transfer and convertibility assessment. S&P also maintained the "stable" outlook for Bermuda's Credit Rating.
In their 2023 report published today, S&P indicated that they “expect the local economy to remain healthy, supporting government finances, limiting the need to increase gross debt, and supporting the territory’s external position (including current account surpluses).”
S&P highlighted in their report that, “The international business sector continues to propel Bermuda’s economy, despite uncertainty about the global minimum corporate tax initiative” and “Tourism has also increased markedly in 2023 and should further support growth.”
“We believe that good economic activity will support low fiscal deficits and limit the need for incremental new borrowing. The government borrowed $890 million in 2022 to repay upcoming maturities and expects no new borrowing until after 2028.
S&P also highlighted in their report that, “Despite the economic recovery, we expect a fiscal deficit in line with the government’s budget of 1% of GDP this year. We assume that a combination of GDP growth, recovering revenues, and a commitment to fiscal consolidation will lead to decreasing fiscal deficits, and will stabilize the government's net debt burden.”
The report continued the positive stance regarding Bermuda by stating that, “The ratings reflect Bermuda's strong institutional framework and prudent policymaking, prosperous economy, favorable external profile, good fiscal flexibility, moderate net general government debt burden, and limited monetary flexibility. Institutional and economic profile: Institutional stability and a wealthy economy support the Ratings.”
In response to the report, Premier Burt stated, “The news today that S&P has reaffirmed Bermuda’s A+ Credit Rating and that the outlook remains stable, following their annual review carried out in April 2023, is an independent endorsement of this government's prudent and considered fiscal strategy.”
“I am pleased by this outlook which reaffirms the sound economic policies, stewardship and vision of this government. Despite the socioeconomic impacts of the pandemic, foreign wars, global inflation, and disruptions in supply chains, we continue to meet our targets and advance policy initiatives necessary for long-term economic growth.”
“This government recognizes the importance of Bermuda’s Credit Rating and is committed to doing what is necessary to maintain our ratings while balancing our social agenda by providing relief that will lessen the financial burden of many individuals and businesses.”
“Bermudians should be encouraged by the latest review of S&P as it helps to validate the work of Bermuda's Government on our path to continued economic recovery.”