Fitch Ratings Downgrades Bermuda To ‘AA’
[Updated with Premier/OBA response] Fitch Ratings has downgraded Bermuda’s Long-Term Foreign Currency IDR to ‘AA’ from ‘AA+’, and Long-Term Local Currency IDR to ‘AA+’ from ‘AAA’.
A statement released by Fitch today [June 26] said, “The downgrade of Bermuda’s ratings reflects its weak macroeconomic performance relative to peers, deteriorating fiscal and government debt ratios and lack of a credible fiscal consolidation strategy.”
“The weak economic performance has accelerated the deterioration in public finances observed since 2007,” said the ratings agency. “Large fiscal deficits have resulted in an important build up of government debt since 2007.”
“Bermuda is to hold elections before February 2013. Fitch expects the next government to renew its commitment to business friendly policies irrespective of the electoral results.
“However, given the elevated deficit and unfavourable debt trajectory, Fitch will continue to monitor the plan for fiscal consolidation under the new administration,” said the statement.
Fitch also said: “The ratings are supported by Bermuda’s wealth (the fourth-highest GDP per capita among Fitch-rated sovereigns) and the high savings rate relative to its peers in the ‘AA’ rating category.
“Bermuda’s competitive advantage as a domicile of choice for insurance, reinsurance and financial services companies remains intact. This is due primarily to its sophisticated legal system, strong regulatory framework, simple tax regime, proximity to the US market and highly-skilled human capital.”
In December 2011, Standards & Poor’s also downgraded Bermuda, lowering its long-term sovereign rating on Bermuda from AA to AA-. Fitch previously ranked Bermuda as ‘AA’ from 1994 – 2006, and upgraded us to ‘AA+’ in 2006.
The practical impact this could have on Bermuda is a potential interest rate increase on money the Government borrows, with the downgrade coming as the Government is presently meeting with potential lenders to finance the 170 million plus budget deficit.
The full statement from Fitch follows below:
Fitch Ratings-New York-26 June 2012: Fitch Ratings has downgraded the following ratings of Bermuda:
–Long-Term Foreign Currency IDR to ‘AA’ from ‘AA+’;
–Long-Term Local Currency IDR to ‘AA+’ from ‘AAA’.The Rating Outlook is Stable.
Fitch has affirmed the Short-term Issuer Default Rating at ‘F1+’ and Country Ceiling at ‘AAA’.
The downgrade of Bermuda’s ratings reflects its weak macroeconomic performance relative to peers, deteriorating fiscal and government debt ratios and lack of a credible fiscal consolidation strategy. A narrow and volatile revenue base further limits Bermuda’s scope to maintain large fiscal deficits and debt burdens. However, the country benefits from access to international capital markets and the local financial system. A sinking fund also provides the government with some flexibility to service its debt.
The ratings are supported by Bermuda’s wealth (the fourth-highest GDP per capita among Fitch-rated sovereigns) and the high savings rate relative to its peers in the ‘AA’ rating category. Bermuda’s competitive advantage as a domicile of choice for insurance, reinsurance and financial services companies remains intact. This is due primarily to its sophisticated legal system, strong regulatory framework, simple tax regime, proximity to the US market and highly-skilled human capital.
Such credit strengths, however, are counterbalanced by Bermuda’s lack of economic diversification, weaker growth prospects and limited policy flexibility. This is resulting from its currency peg to the American dollar and its narrow fiscal space. Moreover, Bermuda’s economy depends extensively on tourism and insurance business, two industries that are in a mature stage and face strong competition from other jurisdictions.
A combination of cyclical and structural factors continues to affect Bermuda’s performance. The economy posted three consecutive years of GDP contractions after the global financial crisis. Fitch expects GDP growth to remain negative in 2012 and be zero in 2013 before rebounding slightly in 2014. This would be the weakest output performance among all ‘AA’ Fitch-rated sovereigns .
The weak economic performance has accelerated the deterioration in public finances observed since 2007. Fuelled by a still-contracting economy and higher expenditures, the government deficit for the 2011/12 fiscal year could be equivalent to 4.5% of GDP. This figure is twice what was originally estimated and above the median in the ‘AA’ rating category. Fitch foresees fiscal deficits to remain above 4% of GDP in 2012 and 2013 before improving moderately in 2014 after economic growth is restored.
Large fiscal deficits have resulted in an important build up of government debt since 2007. Although from a low base, the government debt to GDP ratio has rapidly converged to the ‘AA’ median of 23% in 2011. More importantly, Bermuda’s debt/revenue ratio at 150% in 2011 is above the AA’ median, and is deteriorating faster than its peers. Moreover, recurrent changes to the debt ceiling, withdrawals from the sinking fund to meet interest payments and the inability to implement a multi-year budget program have undermined the credibility of the fiscal policy anchor and the commitment to fiscal consolidation.
Bermuda is to hold elections before February 2013. Fitch expects the next government to renew its commitment to business friendly policies irrespective of the electoral results. However, given the elevated deficit and unfavourable debt trajectory, Fitch will continue to monitor the plan for fiscal consolidation under the new administration.
A sustained weak economic performance, lack of a credible plan to consolidate public finances, and continued deterioration in the sovereign’s fiscal metrics could put downward pressure on the ratings. Regulatory changes that negatively affect international companies operating in Bermuda could also undermine creditworthiness. Conversely, resumption of economic growth and concrete signs of fiscal consolidation and debt stabilisation would help to sustain Bermuda’s ratings
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Update 2.03pm: The Ministry of Finance has issued a response, saying they “anticipated that the continued turmoil in the global economic environment and tough conditions at home could put Bermuda’s sovereign rating at risk of an adjustment.”
Premier and Minister of Finance Paula Cox said, “While today’s ratings adjustment is not positive, it sees Bermuda return to an AA rating, which Bermuda held from 1994 to 2006. In 2006, Fitch raised Bermuda’s rating to AA+. Today’s adjustment returns us to pre-2006 ratings. It is important to note that Bermuda continues to receive high Ratings from all 3 major Ratings Agencies.”
The Premier continued by saying, “The Government will continue to balance the needs of all citizens during these tough times. We will continue press ahead with important investments in infrastructure which will bring jobs, income, and new opportunity to Bermudians.
“As the Premier and Minister of Finance, I remain committed to bringing enhanced efficiency to the Civil Service, and freezing spending at current levels. I am confident this is the correct fiscal consolidation strategy, as further spending cuts will only serve to weaken the economy during these tough times, putting more strain on Bermudian families.”
Premier Cox concluded by saying, “The Government is pleased that the adjusted rating remains in the top tier of the ratings. At AA, Bermuda’s sovereign bond rating is only two notches below the highest rating of AAA. I am also pleased that Fitch has maintained a stable outlook to the AA rating.”
The Ministry of Finance noted that, according to Fitch, “Bermuda ratings are supported by Bermudians wealth, the fourth highest GDP per capita among Fitch-rated sovereigns, and the high savings rate relative to its peers in the ‘AA’ rating category. Bermuda’s competitive advantage as a domicile of choice for insurance, reinsurance and financial services companies remains intact due to its sophisticated legal system, strong regulatory framework, simple tax regime, proximity to the US market and highly-skilled human Capital.”
Update 5.37pm: The PLP released a statement saying it is while today’s “ratings adjustment is not positive,” Bermuda still has the 3rd highest [out of 20] ratings awarded by Fitch,” and also said it is “important that the Bermuda Government continue to press ahead with its investments in infrastructure…”
Update 5.44pm: OBA Shadow Finance Minister Bob Richards — who is expected to comment in greater detail tomorrow — said, “Today’s downgrade of Bermuda by Fitch Ratings is a serious blow to Bermuda. It casts doubt on the Government’s credibility to properly manage the public purse and reveals the Island performing poorly relative to other jurisdictions.”
Update 6.58pm: Fitch released another statement saying the Bank of Butterfield’s ratings are “unaffected” by Fitch’s downgrade of Bermuda, and while the rating Outlook on Bermuda remains Stable, any adverse change to the country’s Outlook would result in an equivalent change to BNTB’s rating Outlook.
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- Fitch Downgrades Bermuda’s Ratings to ‘A+’ | Bernews.com | May 30, 2014
3rd World…heh Here we come!!!!
Looking at history, Bermuda is right back where is was from 1994 – 2006. AA.
Why all the fuss. PLP took Bermuda from AA where UBP left it to AA+, and now after a recession we’re back to AA.
Remember your history.
The ratings drop is not due to the recession. It is due to “deteriorating fiscal and government debt ratios and lack of a credible fiscal consolidation strategy”.
Chart The ratings drop is not due to the recession. It is due to “deteriorating fiscal and government debt ratios and lack of a credible fiscal consolidation strategy
@ Chart, what are the tell tail signs of a country in recession…
Hahhaa, don’t mind laughing. Some people would rather Bermuda suffer for the sake of pleasing 3 people from a ratings agency.
So you would prefer for the government to fire people to balance the books so it could prevent a downgrade to the same level we had in 1994 – 2006.
Seems a bit harsh don’t you think?
Ok what are your solutions? At the end of the day some ae going to lose their jobs anyway you slice it.
LOL
How are they going to lose their jobs if they are not fired?
Its called being made redundant…you know, that thing that successful companies do to prevent them from going under, much unlike this island…
Governments are not companies. But i see you and I have an opposite view ideologically.
I feel you, honestly I think we’re just stuck between a rock n a hard place. Some of this possibly could have been avoided, coulda should woulda, but we’re here now, let’s just hope we make the right choices.
Government has no more money to pay all Government workers in full. To do so they are presently borrowing money, but this is likely the last time this will be posssible as no one is left to lend the sums required, at a cost that is affordable, just. Government revenues are falling so if there is no money, how will these workers get paid? Just because they are Goverment doesn’t mean there is an endless supply of money, despite whta the PLP say. There are several options, none of which are good. Make around 1,000 and maybe more redundant, or reduce hours or reduce pay by around 20% are the less costly overall.
You seem to think that this is still Bermuda’s choice. That went out the window when our debt escalted to current levels. The more debt we acquire the longer the eventual austerity measures will have to be.
Government employees will lose their jobs because the debt holders will demand it before they lend us any more money. And whomever is the Government at that time, will have to agree to it. We will, quite simply, have no choice in the matter.
The logic behind this is there has been a decline by the thousands in Bermuda over the last couple of years. There are less people paying taxes, less companies bringing in foreign labor, etc. Therefore, it stands to reason that government to an extent doesn’t have as much work to be done. Therefore, does it make sense for the taxpayer to be paying salaries of people that are barely doing anything at their job? The civil service should be cut to an extent or we will never get out of the recession. It should have been cut years ago.
But that only creates more unemployed people in your economy. The costs don’t disappear.
“I once was blind but now I see…I have not brought my specks with me!” Wake up electorate. You’re going down the tubes real quick and enough of the PLP spin, spin spin! Get this Government OUT…YESTERDAY!!!!! TOO MANY MISTAKES WITH FINANCING!!!!!!!!!!!
Going down the tubes real quick??? Are you serious?
So Bermuda Goes up to AA+ in 2006 and back to AA today, and Bermuda is “going down the tubes”
A bit much don’t you think?
Your analysis is very simplistic. We were AA with less than $200 million in debt and an economy that was still chugging along … we will soon be over $1.5 billion in debt and our economy is very sick. That’s a very big difference.
You’re comparing 12 years of stability to a downward trend. The two are entirely different. And NEVER in the past has Bermuda has $1.3bn (or more depending on whether you count unfunded pensions) of escalating debt.
You will no doubt ignore the Fitch comments about weak economic performance, lack of credible fiscal strategy, and the fact that Bermuda is termed the ‘weakest’ of the AA sovereigns. Ignoring those things doesn’t make them go away.
Whay will Cox do? Borrow another $200m and tell us that ‘debt is actually a good thing’?
I’ll ask the same question above, would you prefer the government fire 1000 employees to balance the books?
If not, then what would you suggest. Debt sucks, i don’t like it, but austerity is MUCH worse.
So your plan is to continue as is and hope (pray)for things to get better?! You must be a supporter of the Government or a government worker afraid to lose your job. Again what are your solutions?
LOL
Gov put forward a plan, the one that makes the most sense. Freeze spending but don’t cut spending and fire people.
The economy will recover, as it always does, markets work. Its not about hope and pray its about working harder.
But you sound like you would prefer for Bermuda to have AA+ and 1000 more people be out of work than AA and 1000 more people in work.
I’ll take that latter and that is an ideological difference. Nothing to do with where i work.
Markets work when governments stay out. Government employment has now become a form of welfare…welfare that is funded by borrowing…borrowing that has no end in sight.
We now have a budget that we always overshoot. We have revenue targets that we can’t reach. We are digging a hole that we may not be able to get ourselves out of.
It’s AA but the weakest of AA so it’s really a question of being A and no people out of a job a deficit in the Budget or AA with a balanced budget and Government layoffs. Notice that itch’s forecast is for 2013 and 14 is for Government actually doing something to balance the Budget. If it doesn’t, then you can see the ratings take another hit.
Funny you pay no attention to the increase in the Gov workforce since the PLP came into power. They also haven’t frozen spending, see Wedco development plans and a rather lofty tourism sports complex…doesn’t seem frozen to me. Not to mention they just increased the Gov wage expenditure by $8m due to salary increases. Wake up they have not frozen anything…they can’t service the debt and the downgrades will come faster and companies will begin to leave starting a downward spiral from which the island will not be able to recover. They need to “trim the fat” and the best way to do that is reduce the workforce.
They could try not wasting $100m here and $100m there building condos that no-one wants to live in.
Ouch. Didn’t they drink the green kool aid?
Pretty painful timing given that Government is out flogging another debt issue right now. Our interest rates just went up.
And so it starts….So glad my mortgage is almost paid off
What a surprise!
TOO MANY MISTAKES WITH FINANCING!!!!!!!!!!!
Umm, too many mistakes with everything they have touched.
“I once was blind but now I see…I have not brought my specks with me!” Wake up electorate. You’re going down the tubes real quick and enough of the PLP spin, spin spin! Get this Government OUT…YESTERDAY!!!!! TOO MANY MISTAKES WITH FINANCING AND INCOMPETENT SPENDING!!!!!!!!!!!
This can absolutely happen and it is happening – shocking result for the Bermuda Government; did they think that the outside world woudln’t notice?
I wonder how the PLP will spin this one.
I wonder what all the people on here screaming the sky is falling have to say when they realize Bermuda is back where it was from 1994-2006. I’m quite sure you all didn’t say hell was about to freeze over then, why now?
Its AA, its not like we just hit junk status, grow up!
Umm, gov is in the process of going out to borrow several hundred million. This ratings drop will have big ramifications on the interest we must pay to borrow that money. It is absolutely a big deal.
Umm I though we were supposed to be in the “platinum period” right now. Funny how everything went downhill after that comment was made, I wonder why. So basically what I get from your comment is, were back where we were so its ok. Well things are getting progressivly worse (no pun intended) and I thought we were supposed to be going forward, and just because we had that rating under the ubp doesn’t mean it wasn’t getting better, this isn’t one of those “the ubp did it too” scenarios. 14 years of undermining everything the ubp did and here are your results. Happy? Sh!t even outsiders can see what we need to do to get back on track.
Oh I’m sorry, I wasn’t aware that from 1994-2006 we were 1.5 billion of debt with that climbing by the day. There is a ginormous difference between were we were then and were we are now. I can’t believe how many in Bermuda believe denial is a river in Eygyt. Mind boggling really.
@ What Options. We weren’t in debt to a tune of 1.3 billion back in 1994-2006.
You work for the civil service don’t you?
Careful guys, stay on script…..remember Uncle Bob told us that ratings agencies don’t matter……you can’t have it both ways….. The spin to watch is the OBA suddenly embracing this stuff…. Brought to you by the same people who said JP Morgan was safe as houses…. meanwhile $2BN later…..
He did say they didn’t matter, now he’ll say the matter. Meanwhile the revision is to the same level the UBP had Bermuda in from 1994 until the PLP worked to get it up to AA+. After the WORST recession since the great depression, we’re back to where we were in 1994-2006, but oh no, watch out, the sky is falling!
That’s not the sky, its our standard of living lol…that’s not even funny…
Note that they warn that the ratings may slide again unless the Government after the next election undertakes “fiscal consolidation”.
It’s inevitable – Government must cut its costs. You can’t keep borrowing forever.
Moreover, borrowing to pay government salaries? Cut costs and salaries and combine ministries. For a 21 square mile island, we have too many ministries. Most city corporations in the world are bigger than our country.
we need a plan, how to cut deficit, create new jobs (private sector)to grow the economy..
Need I say more than “what an incompetent cog”…. honestly… PLP should be ashamed. They are taking what was paradise in to gangsters paradise. Shootings, bad economy.. Why not just rename to “Bermaica” ?
AA rating is still pretty damn good.
AA is still pretty damn good if you do not already owe TOO MUCH!!!! you just increased the cost of the $115,000,000 a year on the current debt and you now have to pay more for the “NEW” debt you want to pile on to make the payroll……..more downgrades to follow……you can stall Heather Matthews with late release of data but the rating agencies are now wise to what they are dealing with here and will not tolerate it…..
Waiting to hear what the Premier say’s..
Comment, Ms. Cox?
I don’t find this particularly alarming, whilst I agree the increasing debt is of concern if we consider the Bank’s and other countries worldwide that have suffered the same fate you should know that this does not mean much. Additionally Fitch is one rating agency….I believe the comments blaming the PLP is a bit harsh, not saying they are not somewhat at fault because under the previous Premier we have definitely deteriorated. The current Premier and administration are fully aware of the debt and economical issues facing this island. She is well educated and it doesn’t take rocket science to know what is going on. In economics sometimes we have to go back to move forward. Ewart tooks us way back and we are feeling it now!
I am telling you now the OBA does not have the have the BRAWN to deal with this either!! The talk and good talk. And all they do is highlight the negative with no meaningful suggestions! Trust me this is economics 101…..keep education yourselves and be aware of the elephant in the room!
@Bermy’s Finest – Funny how you put full blame at Ewart’s feet for creating our current situation. You seem to have conveniently forgotten who was supposed to be holding the purse strings during his reign. Paula Cox must to be held accountable for much of where we find ourselves today. Because she is well spoken and well educated we seem to think she is qualified to handle Bermuda’s finances properly. It should now be very clear that she is not good at it.
you are a damned fool to think like this…..you too are another one of these Government workers afraid of losing your BMW! Its gonna happen sooner or later, so your best to lose it now rather then later when we are another 1.5 BILLION IN DEBT YOU FOOL!!!!!!
1.5 BILLION!!!!!! with thoughts of “raising” (joke right) another 200 MILLION to pay the current bills! WTF are you blind you people in Government (not just the Government Ministers) but YOU, average man that works FOR Government?
Your greed is going to get you all on the cover of some magazine that will go down in history as the party that traded Bermuda’s money and lost it all thinking they were in charge and knowing what they were doing…..trust me.
Im not happy with the level of debt my country has. Who cares what letters some organizations gives my country? Fact remains that my children and my childrens children will still be paying off this debt. Lets not play around with words, that is the ONLY thing that really matters in this regard if u ask me!!
Because the ratings effects how much interest the Government has to pay on the money it borrows. The worse the rating, the higher the interest rate, the more money we owe.
Would like to give a THANK YOU and a round of applause to Bda Gov.
Guess this is the “road to recovery”?
@ Bermyluv,
You are correct – the civil service has been a form of welfare for some time now, particularly since many programs were cut a couple of years ago, leaving hundreds of administrators with nothing to do. It would be cheaper to fire those who are no longer required and support them with a properly designed benefit system than to continue to pay them a full salary + pension for doing next to nothing.
The civil service is clogged up at all levels with ineffectual people who are more concerned with keeping their own job than doing what is required for Bermuda to improve. Remove these people and it will give those who know what they are doing a chance to actually make some progress.
It is interesting to note that neither political party has put forward a real solution to address this problem, with both proposing to solve it through a hiring freeze & relying on people retiring at 65.
The glaring problem with this approach is that there are many highly competent civil servants of retirement age with decades of experience who could provide years more of high-value service to the public, while there are also many younger civil servants who are not really competent as they were hired for the wrong reasons, yet they are free to remain in the system for decades.
The real solution is for the G-ment to put the civil service on notice that anyone not performing should not expect to keep their job and to follow up by introducing a real performance-review system that objectively identifies people who really need to be there Vs those who don’t so the civil service can be whittled back down to the skilled and effective organisation that Bermuda needs and taxpayers deserve.
@ Welfare Reform:”The real solution is for the G-ment to put the civil service on notice that anyone not performing should not expect to keep their job and to follow up by introducing a real performance-review system that objectively identifies people who really need to be there Vs those who don’t so the civil service can be whittled back down to the skilled and effective organisation that Bermuda needs and taxpayers deserve.”
That is,IMHO, a reasonable business-minded approach to an untenable problem. We cannot afford to be borrowing to pay salaries. That is like borrowing from the bank to buy groceries, or paying for them with a credit card. NOT a good idea!It only prolongs the inevitable.
To whoever said, “Debt is bad but austerity is worse” – that’s a mind-set I cannot wrap my head around. Ever increasing debt leads inevitably to bankruptcy.
If we choose austerity, it is far better than being forced into it, IMHO
Don’t need Fitch or anyone to tell me Bermuda in in trouble; I see it all over through my own eyes. The stores are closing or closed, people are not working and I am saving less as I have to pay more.
International Business is seeking juristictions that are less expensive and more profitable for their Companies, hence people are leaving……..
The Government is not minding the purse the way they should; taking responsibility for controls to avoid money being stolen or misappropriated. You have people employed in Government that barely do anything but receive a paycheck; this needs to be looked at. You want a job you may have to do more than you signed on for sweetie! If you don;t want to work then hey that’s on you. We have carried people in Government jobs for too long and I know what I am talking about I have an uncle that works there and trust me he is home all through the day………..
It’s time for change and real change. I am not sure if that is with a new party or existing but something has to change. Insanity is doing the same thing and getting the same result or worse. Grovery Stores are in trouble; look at White’s, lower the duty on food so these stores can stay open, what is wrong with this Government. They increase duties and then do a crapy job at managing the controls and then misappropriate the money they are bringing in; get a better handle on your purse!!!!! And Yes, FIRE some people.
Good day all,
Firstly i would like to thank Bernews for the privilige to use there blog to comment on what an interesting story here that is posted.
I would like to comment on it myself.I would like to say that the proof is in the pudding for all those that have been there and stood by the governemnt of the day (PLP), now they have put us in such a rock and a hard place that now our global status ratings have declined. As some earlier bloggers have said also that the rating was the same when the UBP lost the election. Well rightfully so the economy was at a cross roads then also but what happened after that was history also.
I am sure both parties with put there spin on what are the pros and cons of this rating and what it means. No matter how they do spin it, BOTH sides need to come together eat some “humble pie” and come to a common solution to fix the problema dn get Bermuda on a global level back to where we were or higher.
Just as the saying goes for raising a child, it takes a village to raise the child. Well i hope they adopt the same thing for the financial problems also because it effects not just them it effects the whole island. So involve people from every sector of the community to voice concerns and solutions and we might just dig our way out of this enormous hole we are in.
Bernews thank you for giving me the space to write this.
you are a damned fool to think like this…..you too are another one of these Government workers afraid of losing your BMW! Its gonna happen sooner or later, so your best to lose it now rather then later when we are another 1.5 BILLION IN DEBT YOU FOOL!!!!!!
1.5 BILLION!!!!!! with thoughts of “raising” (joke right) another 200 MILLION to pay the current bills! WTF are you blind you people in Government (not just the Government Ministers) but YOU, average man that works FOR Government?
Your greed is going to get you all on the cover of some magazine that will go down in history as the party that traded Bermuda’s money and lost it all thinking they were in charge and knowing what they were doing…..trust me
PLP borrowed $500 million last July and coming next month they are going to borrow another $300 million. Due to their complete negligence in the handling of the public purse they are jeopardizing the future of this island. The Island may not in the near future be in a position to finance this debt and thus will be forced to increase the taxes and thus force out further international business, on top of all of the other policies that chased out the international business. We should never have gotten in this situation and now I am very scarred for my future and my children. I would like to thank the PLP for doing this to us.
Where are the Cedar Beams.
A toothpick in your a#s.
To the green koolaid crowd, you can try all you want to convince Bermudians to “think the PLP way” … but the external world does not think that way. That includes our customers and our lenders.
So as long as you continue to have koolaid in your eyes, our economy will continue to tank.
time for more resetting of the dials…..
The world is currently faced with a “Global World Recession”. To think for one moment that Bermuda will not be impacted by such a recession is a “fairytale” that the OBA/UBP likes to promote. Because we are facing an election, this kind of thinking is expected as well, a “political silly season narrative”. It is not surprising that eventually Bermuda’s ratings will decline, as all over the world this is the case during this economic time. I was expecting it to come a little sooner, rather than later, but after all we took longer to feel the real impact of the recession than most other countries. Since this is country that relies upon IB and Tourism, and no natural resources, it has feared fairly well during these difficult times. The ratings are still in the upper category, and so that says a great deal about Bermuda.
Overall, Bermuda will continue to ride the recession, but more difficult times will come, if the world recession does not bounce back. So this is not something that is totally the blame of the government alone, our economy is based upon the world economy, if they catch a cold, so does Bermuda. No matter who the government of the day is, both will be faced with the same problem. As Mr. Richards spoke on the talk show recently, “He too will also have to borrow Money to keep Bermuda’s economy going”…at least he was honest in his statement there. There is no quick fix to this recession; we are all faced with a challenge ahead of us. Overall, the government is riding the storm fairly well, and facing it head on. Stop playing the blaming game, and examine those folks who actually contributed to the world recession in the first place……White collar crime on Wall Street is a start……dig a little deeper and find the real answers…..What about our private debt, it is much larger than the government debt?……..let look again…..Private debt also impacts our economy……
You again Betty?
The government is not competent. They have no ideas other than to get us more in debt. Damn fools, the lot of them.
Special girl, goodness me, what planet are you on??
The one I’m on has Bermuda in one heck of a mess.
Specialidiotgirl4…I am actually embarrassed to read your post.You can not be serious to blame the huge problems I BDA on the “WW Recession”.Countries like Canada,Panama,Brazil,and South Africa have per capital debt less than 300% of that of Bermuda and were able to manage their debt with prudent government spending,shrinking the size of the civil service and by manageing the controlled sale of their natural resources.
So here we are with no natural resourses(we have sent IB packing),a civil service aat twice the size it should be and a government that has its own employees stealing for personal gain.
So take no comfort that Bermuda is part of the WW recession.It ended 18 months ago.We’ll suffering the hangover due to this poor excuse for a government.
“To think for one moment that Bermuda will not be impacted by such a recession is a “fairytale” that the OBA/UBP likes to promote.”
Wow! Your memory does not serve you well girl. Do you not remember when Mr. Richards was saying to get prepared for the storm and it was the PLP that said it wasn’t going to affect us and that Mr. Richards was merely “scare mongering”? That is in many articles that are archived if you want to go back and take a look. What the OBA IS saying is that things would not have affected us this badly if the PLP hadn’t continued to spend exorbitantly and had put some money aside like Bob suggested. None of you PLP supporters want to give Bob any credit cause you are mad that he was right. You don’t like it when your party looks like a bunch of incompetent idiots so you twist things around make pitiful excuses for poor governance. You are so far gone from reality it is scary!
To OBA, the swing voters are on your side….just admit that the government is bloated, and for starters you don’t need the MP/Ministerial salaries for the first 4 years that you are in office because the country needs the money. Follow Bloomburg’s example, besides y’all have businesses and high paying salaries in the private sector.
C’mon OBA show me what you’re made of
“While today’s ratings adjustment is not positive, it sees Bermuda return to an AA rating, which Bermuda held from 1994 to 2006. In 2006, Fitch raised Bermuda’s rating to AA+. Today’s adjustment returns us to pre-2006 ratings. It is important to note that Bermuda continues to receive high Ratings from all 3 major Ratings Agencies.”
Look Bermuda held the rating of “AA from 1994 to 2006″. So our ratings only changed a few years ago., It has not been that way for merely five years. It is expected during this Global Recession, that our ratings may fall back to 2006.
@xfiles Listen our Mother country England did all what you suggested to deal with this recession. I was there to see it!! They stop spending, & cut were ever they could make major savings….and guess what??……It did not help……..UK is now facing a “double-dip recession”. Bermuda has the lowest debt in comparison to most countries in the world. SO while some great economists’ suggests a country ‘not spent’ during a recession, other great economist’s suggests that a country ‘should spent’. But, those countries that did little spending did nothing and are sinking back into a recession. Just the fact that great economist do not have the answers, is a clear indication of how complicated this situation is. So your great solution has failed over and over again in almost every country in the world…..what the OBA/UBP got next???? What solution do you have to fix this economy? I think not much, as it will take time and the ride will be slow and tough one in deed.
I hear you brother!
I must confess that I have never fully understood the effect of these ratings but just taking time out to read some of these comments demonstrates at least what it means to you….ordinary Bermudians.It really is food for thought I must admit.
Does anyone have any ideas as to how we can turn this around? I believe that government cannot and does not have all the answers but that among us as Bermudians somebody does have the answer (either individually or collectively).