Jersey maintains S&P credit rating

Monday 17 January 2022

Jersey has maintained its credit rating of AA-/A-1+ after Standard and Poor's latest review.

In a short announcement on Saturday, the Government reported that S&P's rating was "based on a stable outlook for the island", which they said was underpinned" by a "strong balance sheet and substantial reserves".

Treasury Minister Deputy Susie Pinel commented: "I am pleased that our strong credit rating is unchanged, and that S&P continues to see Jersey as a stable economy."

The Government has not released S&P's full report. Express has requested this and is awaiting a response.

Guernsey maintained the same credit rating as Jersey. The report described the island's economy as having "progressed through the pandemic relatively unscathed", having shrunk by just 3% in 2020.

The report observed that Guernsey's government balance will "remain in a structural deficit of about 3.2% of GDP on average over 2022-2025, well above historic norms."

Turning to taxation, S&P added: "We also do not yet incorporate any new meaningful tax measures into our projections, despite the ongoing GST discussions. We note that previous administrations have attempted but been ultimately unsuccessful in implementing a GST due to strong local opposition. Another avenue mooted has been to cut current spending.

"However, given the already very small share of central government spending relative to GDP in Guernsey, particularly for its development level, we are less certain such measures would have a meaningful impact.”

Guernsey's Treasury Lead, Deputy Mark Helyar, commented: "We are pleased that S&P Global Ratings have once again confirmed our strong credit rating and that we emerge from the pandemic in an economic condition which S&P describe as ‘relatively unscathed’. That is a credit to the strength and resilience of our community and our economy.

"However, their revision of the outlook from stable to negative is a warning that we must not ignore our financial challenges. This year we must address the shortfall in funding public services that we will face as a result of our changing population. We’re living longer and having fewer children and that means fewer people working and paying taxes. It also means more people using services, especially pensions, health and care services, which pushes the cost of public services up significantly. We need to safeguard our future for generations to come and we’ll be talking about that a lot more with islanders in the weeks and months ahead.”