The Cayman Islands government’s debt rating has stayed the same and maintains a “stable” outlook going forward, according to Moody’s Investors Service.
Moody’s reaffirmed Cayman’s Aa3 debt rating on Feb. 17, putting it three places below the highest possible rating of AAA for sovereign debt.
The Moody’s evaluation gave Cayman high marks for gross domestic product, financial strength and institutional (political/government) strength.
“Our rating proves that government’s general fiscal fundamentals are strong,” Finance Minister Marco Archer said.
“The high rating and stable outlook for the Cayman Islands is attributed primarily to a very high gross domestic product per capita, high levels of economic development and the government’s commitment to reducing debt,” he added.
Moody’s said the rating decision was driven by Cayman’s comparatively low and falling debt burden, a high per capita income and a strong institutional framework including a broad consensus on macroeconomic policies and fiscal oversight by the U.K.
Moody’s reported that Cayman’s estimated GDP per capita of US$57,936 for 2017 is among the highest in Moody’s rating universe.
Strong revenues and budget surpluses, since 2013, have reduced Cayman’s debt burden. The debt-to-GDP ratio is expected to fall to 17 percent in 2017 and further still in 2019 when the government plans to pay most of a single large bullet bond payment from its cash reserves.
A further improvement of Cayman’s bond credit rating would require greater and more diversified economic growth and sustained lower debt, the rating agency said.