B1BUSINESS
TUESDAY, AUGUST 23, 2016
business@tribunemedia.net
Bahamas ‘dodges junk status bullet’ Retains investment grade despite Moody’s downgrade Outlook upgrade positive for Gov’t, economy Bran: ‘Breathing space to get our house in order’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Bahamas yesterday “dodged a bullet” after Moody’s chose not to downgrade its creditworthiness to ‘junk’ status’, and instead upgraded its outlook on this nation to ‘stable’. The international credit rating agency maintained the Bahamas’ ‘investment grade’ status at the lowest possible level, downgrading its creditworthiness by one notch - from ‘Baa2’ to ‘Baa3’ - but that was as bad as it got for the Government. Apart from avoiding ‘junk’ status, the Christie administration can take positives from Moody’s decision to upgrade its outlook on this nation’s economic and fiscal prospects to ‘stable’.
K P Turnquest and Branville McCartney This implies that the Bahamas faces no prospect of a further Moody’s downgrade in the short to medium term, with the rating agency saying it expected both the $6.778 billion national debt and economic growth to “stabilise” within the next two years. Moody’s, in an upbeat assessment of the Bahamas’ immediate prospects, said it expected this nation’s economic growth prospects to “strengthen” between now and 2018, returning to levels close to its 1-1.5 per cent. However, it acknowledged that the
Bahamas’ economic and fiscal fundamentals - especially its strength - had “materially decreased”, and this nation has much work ahead of it to return to a sustainable fiscal and growth path. K P Turnquest, the Opposition’s deputy leader and finance spokesman, told Tribune Business that the Bahamas had “dodged a bullet” after Moody’s chose not to downgrade this nation to ‘junk’ status (see other article on Page 1B). He described the rating agency’s one-notch downgrade as “fair”, and added that it represented “mixed news” for the Bahamas and its economy. Branville McCartney, the Democratic National Alliance’s (DNA) leader, described Moody’s verdict and accompanying analysis as “bittersweet” for the Bahamas and its economy. While this nation had avoided the “devastating” impact of a downgrade to ‘junk’ status, Mr McCartney said Moody’s had effectively “given us breathing space to get our house in order again” (see other article on SEE PAGE B4
Moody’s downgrade Tourism ‘wipe out’ branded ‘bittersweet’ concern over Zika By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Moody’s decision to slash the Bahamas’ sovereign credit rating, but maintain it at investment grade, was yesterday described as “bittersweet” by the Democratic National Alliance’s (DNA) leader. Branville McCartney told Tribune Business that the Bahamas was fortunate to have avoided the “devastating” consequences of its creditworthiness being cut to so-called ‘junk’ status, which would have affected both foreign direct investment (FDI) and the Government’s borrowing costs. He added that Moody’s almost seemed to be “holding our hand”, as he suggested that the Christie administration “has some work to do” to reverse both the fiscal decline and the country’s weak economic growth. “What it tells us is that the international community has almost given us an opportunity to make a change in terms of where we are,” Mr McCartney told Tribune Business of Moody’s actions. “It guess it’s bittersweet; a bittersweet type of report given by Moody’s. It’s a downgrade, but it’s not too significant.” He added: “They are holding our hand and giving us breathing space to get our house in order
Bran: Junk cut would have been ‘devastating’ Gov’t confident of short-term rating ‘improvement’ FNM deputy describes agency’s action as ‘fair’ again. For that, I guess we have to thank them.” Moody’s cut the Bahamas’ sovereign credit rating from ‘Baa2’ to ‘Baa3’, one notch above ‘junk’ status, as a result of “weaker economic strength” and low growth, combined with the “persistent increase” in the national debt to $6.778 despite the Government’s fiscal consolidation programme. “They’re saying again that the Government has some work to do,” the DNA leader added. “We must make sure we diversify this economy, get people back to work, that Baha Mar is solved, and that the system of governance we have todate is working. “It calls for transparency and accountability. It calls for putting anti-corruption measures in place so that we can be a country trusted in terms of doing business. “It calls for doing business in this country to be made easy as opposed to a SEE PAGE B4
Canada issues Bahamas travel advisory Opposition calls for ‘aggressive response’ Bahamians urged not to be ‘alarmist’, scare visitors By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Opposition’s deputy leader yesterday warned that the outbreak of the Zika virus in the Bahamas could “wipe out our tourism industry altogether”, with Canada already having issued a travel advisory on this nation. K P Turnquest, speaking after the Government confirmed there were now four Zika cases in
New Providence, called on the relevant Government agencies to employ an “aggressive” approach to combating and eradicating the virus. “That is a very big concern,” he told Tribune Business of the announcement by Dr Perry Gomez, minister of health. “That [Zika] has the potential to wipe out the tourism industry altogether. We hope the Ministry of the Environment and Ministry of Health SEE PAGE B5
Creditors hail PM for ‘not blinking’ in Baha Mar talks Construction to restart in September Christie: Bahamians, including ex-staff, to be paid But no announcement on new owner for project
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Bahamian contractors and other Baha Mar creditors yesterday hailed Prime Minister Perry Christie and his government for “not blinking” in negotiations with China for payment of multimillion dollar sums owed to them. The praise came as Mr Christie last night unveiled a Supreme SEE PAGE B6
Insurers: Treat NHI adviser with a ‘pinch of salt’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Bahamian insurers yesterday hit back at the rosy National Health Insurance (NHI) picture being painted by the Government’s chief consultants, arguing that their comments should be “taken with a pinch of salt”. The Bahamas Insurance Association (BIA), in a riposte to comments by Dr Mark Britnell, head of KPMG’s 4,000-strong global healthcare practice, denied his suggestion that the industry had met with the accounting firm on NHI last week. The Association, in a hard-hitting statement, also directly contradicted Dr Britnell’s glowing assessment of the Government’s NHI Policy Paper, describing it as “lacking in substance”. Reiterating its belief that NHI’s public insurer, Bahama Care, has “no economic justification” and is a political tool, the BIA also called on the Government and KPMG to release studies SEE PAGE B5
BIA hits at rosy picture painted by KPMG Slam scheme’s Policy Paper as ‘lacking substance’ Deny meeting, and label public insurer ‘political tool’
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