News from Anguilla as of
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Anguilla's credit ratings lowered by CariCRIS
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| Published on Wednesday, October 14, 2009 | Email To Friend Print Version
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THE VALLEY, Anguilla -- Caribbean Information and Credit Rating Services Limited (CariCRIS) on Tuesday lowered the ratings on the debt issue (notional) of the size of US$25 million of the government of Anguilla to CariA+ (Local and Foreign Currency Rating) from CariAA (Local and Foreign Currency Rating) on its regional rating scale. The ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean is good.
The downgrade largely reflects the significant effects of the worsening global economic conditions on the fiscal and external positions of the government of Anguilla. Despite the oversight provided by the British Foreign Office, the overall fiscal deficit almost doubled in 2008 following a substantial increase in recurrent expenditure and a decline in recurrent revenue.
Anguilla, like many of its tourism-dependent peers in the Caribbean, has been hit hard by the global economic downturn – a negative shock more devastating than any other external shocks in recent times. Economic activity has slowed faster than expected reflecting the severe drag of the global crisis on tourism receipts and FDI.
The ratings factor in the likelihood of support from the British Government in the event of a crisis given Anguilla’s status as an overseas territory. The ratings on Anguilla also continue to reflect its stable political environment with a history of broad policy stability and extremely low levels of crime.
These, together with the above-average financial market infrastructure, despite limited monetary policy flexibility, also support the ratings.
These rating strengths are tempered by the small, relatively narrow economic structure; the weakening fiscal position; and the widening current account deficits that characterize the external sector.
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