Isle of Man Treasury says Standard & Poor’s Ratings Services has reaffirmed the Island’s ‘AAA’ long-term sovereign credit and senior unsecured debt ratings, combined with its ‘A -1+’ short-term sovereign credit rating.
In their review, Standard & Poor’s states that the Isle of Man’s ‘AAA’ rating is due to its prudent fiscal and economic policies, underpinned by the Government’s net creditor position.
The rating further reflects the Isle of Man’s prudent open, export-oriented economy. Standard & Poor’s comments that “substantial inward investment, a stable business environment and net immigration have supported robust economic growth over the past decade.”
The Island’s robust economic growth is further endorsed by the release from The Isle of Man Government of its latest National Income Figures for the year March 2003 – 2004, revealing an expansion of the Island’s economy of 6.3% in real terms against a forecast of 4%. A total of £1.34bn for goods and services, has contributed to the Island’s lead over the UK in terms of national income per head by 4%, to a ratio of 106%, with Information and communication technology and manufacturing in particular, up 12% and showing rapid development.
In the detail of its review, Standard & Poor’s highlights the Isle of Man’s strong balance sheet, despite recent alleged unauthorized borrowings made by the Manx Electricity Authority (MEA), coupled with uncertain pressures on the finance sector from the recent implementation of the EU Savings Directive.
Despite these factors, Standard & Poor’s believes the Island is on target in April 2006 for the completion of the 0% corporate tax regime for all businesses on the Isle of Man. It comments further that “the government’s overall robust financial position, coupled with close economic and financial ties with the UK, should enable the Isle to weather external shocks or significant changes in its economic environment”.
Commenting on the announcements, Treasury Minister Allan Bell MHK said, “The renewal of the Island’s valuable ‘AAA’ rating – combined with the news that our real economic growth rate has exceeded expectation at 6.3% – is a major boost to the confidence of the Island. It is the highest rate of growth in the last four years and is well in excess of last year’s figure of 5.9%. It is clear evidence of the growth of on island business, as well as the strong flow of inward investment into the Isle of Man.”