MercoPress. South Atlantic News Agency

Falklands, A+ S&P credit rating reaffirmed; strong support for current Legislative Assembly

The A+ rating mentioned FIG’s strong reserve balances, the expectation of fiscally prudent policies over the term of the current Legislative Assembly

The Falkland Islands Government (FIG) is pleased to report that last Thursday, 19 March, following a detailed review of current fiscal and economic information, as well as confidential interviews with FIG officers and other stakeholders, S&P Global re-affirmed the long-term sovereign credit rating for the Falkland Islands as ‘A+’, with a stable outlook.

‘The stable outlook is based on [the] expectation that public finances will remain strong over the next two years,’ S&P said, ‘supported by the government’s high level of assets that more than offset its recent borrowings and will allow it to proceed with its capital plans. It also reflects our expectation that institutional links with the UK will remain strong, anchoring policy stability and security.’

The A+ rating made additional reference to FIG’s strong reserve balances, the expectation of fiscally prudent policies over the term of the current Legislative Assembly, and growth underpinned by solid results in the fishing industry, as well as continued stability in public services and agriculture. Importantly, it takes into account the planned public expenditure on major capital projects like the new port, power station, wind farm and waste facility along with the general maintenance and development investments that occur each year.

FIG Financial Secretary, Pat Clunie, said: “Retaining our A+ credit rating is an excellent achievement especially when set against the current large capital program and financial pressure. It reflects the strength of our underlying economy and ongoing prudent financial management which in turn support our stable outlook. It is a team effort across all sectors of the Falklands that allows us to have something which we can all be proud of.”

The economic and fiscal forecasts do not yet incorporate potential revenue from oil-production. But S&P noted that they ‘could raise the ratings over the next two years if there was an earlier-than-expected and material ramp-up in the territory's hydrocarbon sector and we believed it would have a significant impact on long-term growth rates or the stability of the economy, and we expected this effect would be sustained over the long term.’