“This report is further evidence that our policies are bearing fruit,” Richards noted in a statement on Wednesday.
“With our practical and measured approach, the future of Bermuda is looking much brighter for all.”
The ruling One Bermuda Alliance inherited a national debt of US$1.4 billion when it won the 2012 general election, ending the Progressive Labour Party’s 14 years in power. The debt has grown to $2.4 billion.
“The ratings reflect our view of Bermuda’s effective and predictable policymaking, very high gross domestic product per capita, small and improving fiscal deficits, moderate debt burden, net external creditor status, and lack of monetary flexibility, “ said S&P in its report.
“The stable outlook reflects our expectations that fiscal deficits will continue to improve, resulting in no significant increase in debt.Real GDP annual growth will be about one per cent in 2017 and the territory will remain a net external creditor in the next two years.
We expect broad continuity in economic policies following elections in 2017.”
The report also contained projections based on best and worst-case scenarios.
“A sustained return to more robust real GDP growth and greater economic diversification, balanced fiscal results that persist leading to declining debt and interest burdens, or an improvement in our external assessment could lead to a positive rating action.”
But the report warned: “A return to economic contraction that leads to a resumption of large government deficits and increasing debt and interest burdens or negative banking-sector outcomes could cause us to lower our ratings.”
According to Richards, key drivers stated as the reasons for the affirmation are effective and predictable policymaking and a high gross domestic product per capita.
“The Ministry of Finance and the government as a whole has been working diligently to communicate and implement credible fiscal plans and it is pleasing that S&P has recognised this and affirmed Bermuda’s ratings.
“It is rewarding to see our sovereign rating affirmed at A+, especially when ratings agencies have been extremely cautious, as evidenced by the ongoing downgrades of several countries.”
Richards said the stable outlook reflected the agency’s expectation that the island’s economy would grow over the next two years and help to reduce the deficit, in line with the 2016/17 Budget projections.
“The S&P affirmation reflects its confidence in the government to grow Bermuda’s economy and put us back on the road to success.
“The S&P ratings update report is very positive news as the government remains on track to eliminate the deficit by 2019/20,” the Finance minister said.
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