“Halkitis: downgrade means borrowing costs will go up.” – The Nassau Guardian Business Section

Excerpt from this article; “The recent downgrade to ‘junk status’ by Standard & Poor’s (S&P) is a great ‘incentive’ for the government to reduce borrowing, Minister of State for Finance Michael Halkitis said yesterday.

While appearing as a guest on Guardian Radio’s Morning Blend with host Dwight Strachan, Halkitis explained that the downgrade could potentially result in higher borrowing costs for the government because there is strengthened perception that credit is now ‘risky”.

As Minister of State for Finance, the Hon. Michael Halkitis goes on to explain to the masses what most of them already know; i.e. the possible and most likely ramifications of the downgrade for The  Bahamas, I must ask him if he is serious when he says “……there is a strengthened perception that credit is more risky’ and did we have to come to this point for the Progressive Liberal Party (PLP) government to realize there is indeed a great need to reduce borrowing, as they add two additional seats to be contested in the upcoming elections. Maybe this should read that “there is strengthened perception that the Christie administration has failed at its mandate of a “Stronger Bahamas”; one of it mains goals being [To create a] Prosperous Bahamas, Boosting economic opportunities by focusing on growing the economy, creating jobs, and promoting investment in The Bahamas.” 

It is interesting to note that just in July of this year Minister of State for Finance, the Hon. Michael Halkitis said the government was not worried by the announcement by rating agency Moody’s that it would likely downgrade The Bahamas’ credit rating within 60 days [from July 5^th 2016].  Mr. Halkitis said ‘The Christie administration knows what to do to address the concerns raised by Moody’s, and is [was] committed to doing it.’, yet here we are in December with a downgrade by ratings agency S&P, I guess the minister can always justify his statement by claiming he was addressing Moody’s concerns but hasn’t this ratings agency also downgraded our credit rating since this warning and since the Minister of State for Finance expressed the commitment of his government to doing what they know that they had to do?

What went wrong?

Now we embark on a new year, with a higher borrowing cost i.e. higher interest rates and the only  way that I can see this government fixing the problem, using PLP logic is to increase Value-Added Tax from 7.5 percent to 15 percent; I know we as a people will not stand for this, right?

The Progressive Liberal Party fails for one reason, it is their nature.

END