{"id":29594,"date":"2012-12-21T08:42:06","date_gmt":"2012-12-21T13:42:06","guid":{"rendered":"http:\/\/www.bahamasb2b.com\/news\/?p=29594"},"modified":"2012-12-21T08:51:22","modified_gmt":"2012-12-21T13:51:22","slug":"ernst-young-moodys-downgrade-pivotal","status":"publish","type":"post","link":"https:\/\/www.bahamasb2b.com\/news\/2012\/12\/ernst-young-moodys-downgrade-pivotal","title":{"rendered":"Ernst & Young: Moody\u2019s Downgrade \u2018Pivotal\u2019"},"content":{"rendered":"

\"\"<\/a>The managing partner of a top accounting firm says the Moody\u2019s downgrade of The Bahamas is \u201cpivotal\u201d and reflective of the country\u2019s limited growth prospects.<\/p>\n

Michele Thompson, a top executive at Ernst & Young, believes the downgrade from A3 to Baa1 last Thursday is also indicative of a weak recovery in tourism and the country\u2019s increasing debt levels.<\/p>\n

\u201cWe have a rising debt with weak avenues for sustaining debt. The revenue options for the government remain limited. It\u2019s clearly a reflection of our limited growth prospects, weak recovery in tourism and other key inputs that would make a difference. That places added pressure on our economy,\u201d she told Guardian Business.<\/p>\n

Issues like the Eurozone sovereign crisis and even the general election held in May have also impacted the local economy and played a role in the agency\u2019s latest rating.<\/p>\n

\u201cThe Eurozone sovereign crisis has had a global economic impact since 2010 and I would describe it probably as the biggest global macroeconomic issue of our time, if not the most significant market event since the financial meltdown in 2008. I think this in turn has led to the tightening of credit availability, which as we know is the key to financing growth,\u201d Thompson shared.<\/p>\n

\u201cOur economic performance has traditionally in The Bahamas been coupled with our growth in tourism. We see that the U.S economy is not rebounding currently and 80 percent of our tourism comes from that market. This has always been closely followed by investment, a construction boom and an increase in employment levels. That global impact has been trickled down and our financial services sector continues to be under a lot of strain.\u201d<\/p>\n

In addition to a change in government, major infrastructural investments have impacted the country\u2019s bottom line. The Ernst & Young executive believes these factors have affected investor confidence.<\/p>\n

\u201cYou know when governments change, investors are weary and they want to wait and see where the policy movers are going to take the economy and the fiscal policies that will come into play. People have been in wait-and-see mode. That happened in mid-year and so that clearly would have had an impact on how our economy has moved,\u201d according to Thompson.<\/p>\n

\u201cWe have had massive infrastructural investments undertaken by the government, which I think have been great but what goes hand in hand with that is an increase in debt.\u201d<\/p>\n

Like any other jurisdiction, Thompson doesn\u2019t believe The Bahamas will be untainted by what\u2019s going on globally in the financial services area.<\/p>\n

Edward Al-Hussainy, assistant vice president and analyst at Moody\u2019s, said the Christie administration must take more tangible measures to bolster revenue streams and reign in expenditure.<\/p>\n

\u201cIt hasn\u2019t really been this particular government. It has been a gradual decline over the last few years, a slow and gradual deterioration,\u201d he told Guardian Business. \u201cWhat we are looking for is a strategy to arrest that. The thinking behind the downgrade is we don\u2019t see that coming soon enough.\u201d<\/p>\n

By Scieska Adderley<\/span><\/em>
\nGuardian Business Reporter<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The managing partner of a top accounting firm says the Moody\u2019s downgrade of The Bahamas is \u201cpivotal\u201d and reflective of the country\u2019s limited growth prospects.<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_10223285771444175_51037792744":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[3],"tags":[809],"class_list":["post-29594","post","type-post","status-publish","format-standard","hentry","category-business","tag-moodys"],"_links":{"self":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/29594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/comments?post=29594"}],"version-history":[{"count":0,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/29594\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/media?parent=29594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/categories?post=29594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/tags?post=29594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}