UPDATE 1-Moody's cuts ratings for Bahamas further into junk on eroding fiscal strength

·1 min read

(Updates to add background for tourism, economic recovery)

Sept 17 (Reuters) - Global ratings agency Moody's on Friday cut its sovereign ratings for the Bahamas to 'Ba3' from 'Ba2', citing significant erosion of the country's economic and fiscal strength brought on by the COVID-19 pandemic.

Moody's said it expects a gradual recovery in tourism to leave a long-lasting impact on the credit profile of the Bahamas, through materially higher debt and interest burdens. (https://bit.ly/3tQ4NaH)

The Caribbean, a region most dependent on tourism, has seen a spike in new coronavirus cases fueled by the Delta variant, affecting tourism recovery in countries such as the Bahamas, Barbados and Dominica.

As of Sept. 15, the nation of just 400,000 people had 1,679 active cases of the coronavirus, with a positivity rate of about 25%.

Moody's expects stayover tourist arrivals in the Atlantic island chain to return to 2019 levels only by 2024 at the earliest.

The agency maintained its outlook for the Bahamas at negative, saying it reflects the material risks to the pace of the economic recovery. (Reporting by Bhanvi Satija in Bengaluru; Editing by Shailesh Kuber)

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