Leader of the main opposition Free National Movement (FNM), Dr. Hubert Minnis has accused the government of 'empty rhetoric and broken promises' based on the latest credit downgrade by Moody's Investors Service - the international credit rating agency. According to Minnis, the country's credit rating continue to decline.
'Every day since Moody's placed The Bahamas' Ratings on review for downgrade in July we have learned of a new impact this failure of the PLP (Progressive Liberal Party) Government is having on The Bahamas. And now that Moody's has officially downgraded the country's credit rating the situation could get worse. The PLP Government told us that they had productive meetings with Moody's yet they still issued a downgrade showing their lack of trust in the Prime Minister and this Government.'
Minnis said the Perry Christie led administration has not listened to warnings to 'reign in their spending and now we are in the inexcusable situation'.
'The Prime Minister claims that they have reigned in spending and reduced the deficit but that is just more empty rhetoric and broken promises according to Moody's assessment. The Prime Minister and his Government can only hide behind their smoke and mirrors for so long, before the Bahamian people hold them accountable in the next election.'
The opposition leader said the government has failed to make improvements in the budget, adding that 'even with tax increases and higher fees placed on the backs of hardworking Bahamians they keep spending and putting The Bahamas' financial standing at risk. But unfortunately for the Bahamian people they have become accustomed to the empty rhetoric and broken promises from the PLP.'
Minnis said Bahamians need a 'Government that will standup and fight to improve our economy.the FNM will provide this real leadership for the Bahamian people that they desperately need and deserve for their future.'
On Tuesday, the government admitted disappointment in the downgrade but expressed confidence that the outcome is temporary, stating that 'an improvement will be secured in the short-term'.
On Monday, Moody's downgraded the bond and issuer ratings of the government of The Bahamas to Baa3 from Baa2 , changing the outlook to stable.
Moody's said the rating actions conclude a review for downgrade that commenced on July 1.
Moody's identified the key drivers of the downgrade as prospects of low medium-term growth, pointing to weaker economic strength relative to similarly-rated peers, and the 'persistent increase' in the government's debt ratio, which 'leaves the Bahamas with less fiscal space relative to rating peers.
Moody's also lowered the Bahamas' long-term foreign-currency bond ceiling to Baa1 from A2 and long-term foreign-currency deposit ceiling to Baa3 from Baa2.
The short-term foreign-currency bond ceiling was lowered to Prime-2, whereas the short-term foreign-currency deposit ceiling remains at Prime-3.
The Bahamas' long-term local currency country risk ceilings were lowered to A2 from A1.
The long-term foreign-currency bond ceilings for Bahamas - Off Shore Banking Center is Aa3, and long-term the foreign-currency deposit ceiling is A2 and the short-term foreign currency bond and deposit ceilings are Prime-1..
Moody's said the first driver for the downgrade is the lending agency's expectation that the Bahamas' economic performance over the next five years will 'likely remain subdued and constrained by structural rigidities.'
The agency forecasts that the Bahamian economy will recover in 2016-20, with real Gross Domestic Product (GDP) growth expected to average 1.3 percent during this period, 'the fourth weakest economic performance out of the current 22 Baa-rated sovereigns.'
© Pakistan Press International, source Asianet-Pakistan