Identifier
Created
Classification
Origin
09NASSAU358
2009-06-09 21:33:00
CONFIDENTIAL
Embassy Nassau
Cable title:
BAHAMAS GOVERNMENT DEBT REACHES "DANGER" MARK
how-toVZCZCXYZ0003 RR RUEHWEB DE RUEHBH #0358 1602133 ZNY CCCCC ZZH R 092133Z JUN 09 FM AMEMBASSY NASSAU TO RUEHC/SECSTATE WASHDC 6429 INFO RUCNCOM/EC CARICOM COLLECTIVE
C O N F I D E N T I A L NASSAU 000358
SIPDIS
STATE FOR WHA/CAR
E.O. 12958: DECL: 06/09/2019
TAGS: ECON EFIN BF
SUBJECT: BAHAMAS GOVERNMENT DEBT REACHES "DANGER" MARK
Classified By: CDA Zuniga-Brown for reasons 1.4(b) and (d).
C O N F I D E N T I A L NASSAU 000358
SIPDIS
STATE FOR WHA/CAR
E.O. 12958: DECL: 06/09/2019
TAGS: ECON EFIN BF
SUBJECT: BAHAMAS GOVERNMENT DEBT REACHES "DANGER" MARK
Classified By: CDA Zuniga-Brown for reasons 1.4(b) and (d).
1. (U) The Central Bank of The Bahamas reported that by June
2010 the national debt will rise to 43.2 percent of GDP - a
threshold well above the generally accepted "danger" level
(40 percent). Agencies such as the International Monetary
Fund (IMF) and Standard and Poor's become concerned when this
threshold is crossed, leading some to speculate about a
credit rating downgrade for The Bahamas. Central Bank
representatives told media there is a very real possibility
that the national debt could reach 45 to 50 percent by the
end of 2010 due to borrowing for infrastructure and capital
works programs in Nassau. National debt accounted for 38.9
percent of the GDP in June 2009.
2. (C) Standard and Poor's Director of Sovereign Ratings
told Charge in a private meeting on June 3 that The Bahamas
will most likely receive a negative rating due to their
incapacity to weather the economic downturn and limited
oversight of financial institutions.
ZUNIGA-BROWN
SIPDIS
STATE FOR WHA/CAR
E.O. 12958: DECL: 06/09/2019
TAGS: ECON EFIN BF
SUBJECT: BAHAMAS GOVERNMENT DEBT REACHES "DANGER" MARK
Classified By: CDA Zuniga-Brown for reasons 1.4(b) and (d).
1. (U) The Central Bank of The Bahamas reported that by June
2010 the national debt will rise to 43.2 percent of GDP - a
threshold well above the generally accepted "danger" level
(40 percent). Agencies such as the International Monetary
Fund (IMF) and Standard and Poor's become concerned when this
threshold is crossed, leading some to speculate about a
credit rating downgrade for The Bahamas. Central Bank
representatives told media there is a very real possibility
that the national debt could reach 45 to 50 percent by the
end of 2010 due to borrowing for infrastructure and capital
works programs in Nassau. National debt accounted for 38.9
percent of the GDP in June 2009.
2. (C) Standard and Poor's Director of Sovereign Ratings
told Charge in a private meeting on June 3 that The Bahamas
will most likely receive a negative rating due to their
incapacity to weather the economic downturn and limited
oversight of financial institutions.
ZUNIGA-BROWN