S&P Negative on Bahamas

S&P has revised the outlook on the Bahamas’ BBB rating to negative from stable, it says, based on a deteriorating fiscal profile. The agency sees a government fiscal deficit of about 6.7% of GDP for the fiscal year ending June 2013. It cites a low tax revenue base, and the unlikelihood of any significant reform to increase revenue. It also sees a rise in net general debt to 45%-47% of GDP in 2013-2014 from 41% in 2012. Failure to address the debt and the deficit issues could lead to a rating downgrade.