The Isle of Man Government’s resilience to the economic effects of the coronavirus pandemic is noted in the annual report on its financial standing from the international credit ratings agency Moody’s.
The report provides updated analysis of the Island’s economic and fiscal position and sees the Island’s credit rating downgraded, to Aa3 stable from Aa2 stable.
This announcement mirrors the United Kingdom’s recent downgrade, to Aa3 stable from Aa2 stable, with the report highlighting the ‘close and material institutional, economic and financial linkages between the two jurisdictions’.
While the fortunes of the UK could continue to put pressure on the Island’s credit rating, the report points to the possibility that the two could begin to diverge should the Island’s credit strengths remain intact.
Moody’s notes the Island’s high level of overall reserves and how institutions have been proactive and effective in dealing with external factors such as Brexit and the coronavirus pandemic.
Technological or regulatory changes to key industries - such as insurance, e-gaming, ICT or banking - are regarded as a key challenge due to the concentration of activity in these areas.
Treasury Minister Alfred Cannan MHK said:
‘I am pleased to receive the latest report which provides a welcome assessment and reflects many of the challenges the Island has faced over recent months.
‘The community’s response to the pandemic has enabled our economy to keep moving and for reserves to remain largely unaffected, despite a package of support measures put quickly in place as an immediate lifeline.
‘A careful and prudent approach has placed us on a strong footing and the report acknowledges the Island is unlikely to experience the same economic scarring as elsewhere.’