S&P Revise Bermuda’s Outlook To Positive

April 26, 2018 | 32 Comments

Ratings agency Standard and Poor’s has revised its outlook on Bermuda from stable to positive, saying “Bermuda’s credit story is improving thanks to a return to positive real economic growth in 2017 and 2018.”

S&P’s Global Ratings also affirmed Bermuda’s A+ long-term sovereign credit and senior unsecured debt ratings as well as its A-1 short-term ratings and its AA+ transfer and convertibility assessment.

“Bermuda’s credit story is improving thanks to a return to positive real economic growth in 2017 and 2018,” S&P said.

“We also view the continuation of prudent fiscal policy by the new Progressive Labor Party government as positive. Accordingly, we are revising our outlook on Bermuda to positive from stable, and affirming our ratings, including our ‘A+’ long-term sovereign credit rating, on the territory.”

Premier and Minister of Finance David Burt stated, “Standard and Poor’s in their overview stated Bermuda’s credit story is improving thanks to a return to positive economic growth. The agency added they view the prudent fiscal policy by the new Progressive Labor Party government as positive.”

Premier Burt continued, “S&P went on to add they are revising their outlook on Bermuda to positive from stable. They affirmed their long-term sovereign credit and senior unsecured debt ratings as well as their short-term ratings and transfer and convertibility assessment.

“The positive outlook reflects S&P’s expectations that, in the next 12-to-24 months, real GDP growth will remain moderately positive, fiscal deficits will continue to narrow approaching balance and Bermuda’s net general government creditor position will improve modestly.”

Premier Burt concluded, “I am extremely pleased by this outlook which reaffirms the economic policies, stewardship and vision of this Government. We will continue our collaboration with traditional industry partners in international business and we will advance the progress made in growing and diversifying this economy.

“We promised the people of Bermuda that we would grow the economy and make a more inclusive Bermuda with new avenues of growth providing for more Bermudians to take advantage of economic successes. This is our focus and we are determined to build a better and fairer Bermuda.”

S&P said, “The positive outlook reflects our expectations that, in the next two years, Bermuda’s economy will continue to see positive, although fading, real growth largely from revived tourism demand following the Americas Cup in 2017, and the effects of several large-scale construction projects.

“We also expect the newly elected Progressive Labor Party [PLP] government to continue with prudent fiscal policies, enabling it to reduce its fiscal deficit to near-balance by 2020-2021. Shrinking deficits will, in turn, cause the government’s debt growth to slow, contributing to modest improvement in

“Bermuda’s strong net general government debt creditor position. We further expect Bermuda’s net external creditor position to slowly rise, fueled in part by current account surpluses at about 8% of GDP.”

“The tourism sector’s continuing rebound will help buoy economic growth in 2018. Air arrivals in 2017 were up 11% [compared with 17% in 2016] and hotel occupancy increased 9%. Cruise arrivals were up 5%. Length of stay and daily spending also improved. Hotel occupancy rose to over 60% [compared with about 50% in 2016]. Early indicators show that 2018 could be another good year for the sector.

“We view Bermuda’s policymaking as largely effective, predictable, and proactive and its political institutions as stable. We believe the territory can and is willing to implement reforms to ensure the long-term sustainability of public finances.

“The PLP’s chief priorities are economic revitalization and increasing equity between segments of society. Bermudian governments generally place importance on a policy environment that is conducive to strong economic growth, and relatively
prudent fiscal policy.

“We believe real GDP growth could reach as high as 1.8% in 2018, up from close to 1.0% in 2017 and a big improvement from the flat to negative growth seen from 2009 to 2015. GDP per capita should reach close to US$106,000 by the end of 2018 and about US$109,000 by the end of 2019, giving Bermuda one of the highest GDP per capita figures in the world.”

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Comments (32)

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  1. WSP says:

    Fitch give the PLP time inevitably they will screw it up.Right now they are riding the coattails of the OBA achievement ‘s and when they are finished I doubt they will have any ideas about strengthening the economy.

  2. Really says:

    Thanks to the OBA and Bob for getting the island back in order. Unfortunately Burt will never be able to accomplish what Bob did. Let the circus continue on with Burt and the rest of the jokers from outer space.

  3. Um Um Like says:

    Burt- It’s the CONTINUATION of the prudent fiscal policy that is viewed as positive. Stop acting like you invented sliced bread.

  4. Justin says:

    Another missed opportunity for Burt to thank Bob Richards and the OBA for getting the economy back on the right track. Says a lot about his character.

  5. Yup says:

    Allllllllllll thanks to the OBA!

  6. Lives in Reality says:

    Hopefully, the trend will not reverse in the 2018/2019 reviews (when we see how the current PLP administration’s policies effect the credit ratings), pray they do better than the last two PLP runs (Ewart Brown’s administration fiscal policy was the same as a irresponsible teenage with their first credit card style spending, and Paula Cox’s, we played, now you’re going to pay and dearly to cover what was spent on our pet projects)

  7. Thank you PLP.

  8. Me says:

    Feels like we are in recession though where are the new jobs ?

  9. Vote for Me says:

    Bermuda,
    Is this the independent stamp of approval that we have all been waiting for to demonstrate the PLP’s competence at managing Bermuda’s economy?

    Well done team Burt!!

  10. The Kid says:

    Thanks Bob

  11. Time Shall Tell says:

    “Bermuda’s credit story is improving thanks to a return to positive real economic growth in 2017 and 2018,” S&P said.

    “We also view the continuation of prudent fiscal policy by the new Progressive Labor Party government as positive. Accordingly, we are revising our outlook on Bermuda to positive from stable, and affirming our ratings, including our ‘A+’ long-term sovereign credit rating, on the territory.”

    Thank you PLP.

    • shrew says:

      Clearly the S&P weren’t told about the $1m increase in payroll of the CS. which is essentially the PLP buying votes.

    • Jus' Wonderin' says:

      continuation is the key word meaning the PLP had nothing to do with this hahahaha I want what you’re smoking. All the PLP had to do was continue with the OBA’s policies and claim it as theirs…dummy!

  12. Time Shall Tell says:

    We view Bermuda’s policymaking as largely effective, predictable, and proactive and its political institutions as stable. We believe the territory can and is willing to implement reforms to ensure the long-term sustainability of public finances.

    “The PLP’s chief priorities are economic revitalization and increasing equity between segments of society. Bermudian governments generally place importance on a policy environment that is conducive to strong economic growth, and relatively
    prudent fiscal policy.

    Great job.

  13. Rocky5 says:

    Thank you Bob Richards for turning the ship around. PLP pressure is now on you.

    • So Tired says:

      “We also view the continuation of prudent fiscal policy by the new Progressive Labor Party government as positive. Accordingly, we are revising our outlook on Bermuda to positive from stable, and affirming our ratings, including our ‘A+’ long-term sovereign credit rating, on the territory.”

  14. Justin says:

    I wonder if S&P knows about Morgan’s Point being put on hold?

  15. puzzled says:

    Thank you OBA.

  16. baileysbay says:

    Thanks OBA!

  17. watching says:

    What?? No comments from the peanut gallery?
    Surely had the outlook been negative there would be 200 comments by now signifying the death of Bermuda under the PLP!

    • shrew says:

      YOu can thank Sir Bob for the upgrade. and believe me, it is only a matter of time under the PLP that Bermuda will slide right down backwards again. it goes with the PLPs (and those that voted for them) backwards thinking.

    • Jus' Wonderin' says:

      This is all thanks to the OBA….keep watching and try again but harder next time ;)

  18. nerema says:

    The fruits of the OBA turning the economy around.

  19. Aware says:

    This is incredibly important for Bermuda. Thank you to all involved from whichever party.

    • Wha.. says:

      This is the smartest reply. Thank you for being mature..as others seem to want to always start a political fight! We are one Bermuda but others see otherwise!

  20. Wha says:

    This is the smartest reply. Thank you for being mature..as others seem to want to always start a political fight! We are one Bermuda but others see otherwise!

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