The Minister of Finance the Hon. E.T. Richards JP MP today advised that Standard & Poor’s (S&P) has revised its outlook on Bermuda from stable to negative and affirmed its 'AA-/A-1+' long- and short-term issuer credit ratings (ICR) on the country.

The report said: “We expect Bermuda's economy to stabilize and begin to modestly grow in 2014-2015, particularly if its major trade and finance partner, the US, continues to increase its GDP by 2%-3%, in real terms, as we expect. In addition, the new One Bermuda Alliance government is undertaking a variety of measures aimed at economic revitalization.”

What the new move from ‘stable’ to ‘negative’ means is that if there were a substantial deterioration in either the economic, fiscal, or banking-sectors S&P would likely lower their ratings for Bermuda. 

However, were S&P to become convinced that Bermuda could again soon look forward to sustainable real GDP growth, low fiscal deficits as a share of the economy, and banking-system stabilization (other things unchanged), this could lead them to revise the outlook to ‘stable’.

Minister Richards said, “I was pleased to read in the report that Bermuda’s ratings are supported by our ongoing achievements in attracting and retaining foreign financial services companies and the fact that S&P had faith in the Bermudian economy’s ability to stabilize in the next few years. It is also pleasing to note that S&P has recognized that the OBA is putting various initiatives in place aimed at economic improvement. This of course includes elements of our Jobs and Economic Turnaround Plan.”

Though Bermuda, like a number of other jurisdictions, has seen its outlook adjusted, the Government is pleased that the underlying fundamentals and strengths of our Bermuda economy have been recognised and that we have not been downgraded.