In the wake of the potential credit downgrade by Moody’s State Minister for Finance Michael Halkitis says the government plans to show the agency that its warning was unnecessary and the government has already established plans to stimulate economic growth.
“They put a lot of emphasis and the revisions of the economy and what they believe are our prospects are.
“We will sit with them and explain why there is reason for optimism with investment projects going on throughout the country and the government’s commitment to engage in more infrastructural works this budget season and using public-private partnerships,” Mr. Halkitis said.
The state minister noted that in comparison to other countries within the region, The Bahamas has a better history of paying back its debt and he also noted that economic growth is evident on the Family Islands.
He added that the fact that Baha-Mar, which is multi-billion dollar resort, remains unopened and this was definitely a concern of the agency.
“What we will impress upon them is that the government has had no difficulty in paying their debts and we don’t forecast that we will have trouble paying our debts unlike some persons within our region and have never been a part of any restructure program by the IMF.
“So we need to paint for them the big picture, I know what’s weighing on their mind as well and that is the stalled Baha-Mar project but we hope to have a quick resolution to that but there is a lot of activity going on in the Family Islands.
“Bimini, Abaco, Grand Bahama, Exuma and these developments will contribute to what the government is doing to address the debt issue, I would not say I’m confident but I’m optimistic in the country’s prospects but they will ultimately have the final say,” Mr. Halkitis said.
Responding to recent comments from Free National Movement Shadow Minister for Finance Peter Turnquest who said that measures could have been put in place to avoid this downgrade, Mr. Halkitis says Mr. Turnquest is misinformed.
“If he’s implying that if the government did not implement VAT we would not have been downgraded that is totally out of order and he is misconstrued and misinformed.
“Everyone knows we had to restructure our finances for government revenue, if we had not done it we would have easily added a billion dollars to the debt because the deficit was running in the hundreds of millions of dollars.
“If he is saying VAT is the primary cause of the alert he is totally misinformed and he should know better, that’s why you don’t hear the FNM say they want to repeal VAT, because all they have to say is when they come into power they will go back to customs duties,” Mr. Halkitis said.
The government plans to meet with Moody’s agency sometime this month to finalize the review.
