Above: Nassau (CJ Photo)

By the Caribbean Journal staff

Standard & Poor’s decision Monday to lower its outlook on the Bahamas to negative was unfortunate, but not unexpected, according to a statement from the Bahamian government.

The government said it inherited a “deteriorating fiscal situation where the deficit target was overshot by a wide margin.”

“This was in addition to the absence of a credible plan for deficit and debt reduction or taxation reform by the former administration,” the statement read.

The deficit as a percentage of GDP averaged 4 percent, the government said, but was higher if the sale of government assets were to be categorized as financing as opposed to revenue.

“The government recognizes the severity of the situation which has been inherited and has begun the process of fiscal consolidation, without ignoring the fragile social and economic state of the country,” it said.

It pointed to several initiatives which it had either implemented or planned to implement in the current fiscal year, including the introduction of a White Paper on tax reform, a new mortgage relief programme, a push for foreign investment and “concrete steps” to improve revenue administration and expenditure control.

The Bahamas said it was confident that these steps and other measures would help return the Bahamas to a “stable fiscal outlook and a healthy economy that benefits all Bahamians.”