Bahamas Debt Of Concern But No Further Downgrade
The Bahamas’ projected $550 million deficit for the 2012-2013 fiscal year has “not set off serious alarm bells yet” on Wall Street, Tribune Business can reveal, with no further downgrade to this nation’s sovereign credit rating likely in the short-term.
Analysts who cover the Bahamas for Moody’s and Standard & Poor’s (S&P), acknowledging that the ‘growth trajectory’ for the Bahamas’ $4.6 billion national debt was currently “not sustainable”, said they were both looking for the Government to produce a medium to long-term plan to direct its finances back on to a stable path.
Admitting to concerns about this nation’s “debt pile up” over the past five years, the direct debt-to-GDP ratio having increased by more than 20 percentage points over a five-year period to an estimated 50.6 per cent by end-June 2012, Edward Al-Hussainy, an analyst with Moody’s, said the projected fiscal deficits for 2011-2012 and 2012-2013 were higher than the rating agency had projected.
Yet, while Moody’s has the Bahamas’ sovereign credit rating on ‘negative’ outlook, Mr Al-Hussainy said no further downgrade to its existing ‘A3’ position was likely in the near term.financial