Moody’s Investor Services has issued its latest Credit Opinion on The Bahamas, noting that notwithstanding a fall in the first 10 months of 2006, official foreign exchange reserves remain ample relative to debt service requirements. The report also indicates that the national budget was in a small surplus for the first 3 months of the 2006-2007 fiscal year, due to continued buoyant revenue growth, coupled with expenditure restraint.
The Bahamas enjoys an A3 issuer rating for foreign currency debt and bonds as well as its foreign currency country ceiling. Moody’s says that the strong credit ratings are based on “a very low risk of a payments moratorium in the event of a government bond default”. It also says the strength of the Bahamian economy comes from its proximity and integration with the United Sates, its competitive position in tourism and financial services, and its track record of prudent economic management.
The international credit rating agency maintains that the underlying strengths of The Bahamas and the preservation of a relatively strong external position support a stable outlook. It noted, however, that the country’s economy faces risks posed by the effects on the tourism sector from geopolitical terrorism. That industry, it said, needs to show it can withstand external shocks.
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