This is the second recovery of the financial score of the community, after the BBB – granted to the French Polynesia by the agency Standard & Poor’s last may. In 2016, the Country will be released, in the eyes of donors, the category called “speculative” that it was worth its ‘BB+’ for several years, in terms of perception of credit risk, and will be reinforced by three notches its position in the category called “investment”, much more enviable.
“We are just in one step to return to the situation that we knew in 2001, when Standard & Poor’s had assigned A rating of A-“, commented Jean-Christophe Bouissou, Wednesday, at the end of the press point of the Council of ministers. “Yes, it is comforting. And it is an excellent point to Polynesia and the future borrowings that we will have to be contracted next year. This will change the look of the credit institutions on the Polynesia. (…) This is a new perspective on a Country that is restated, through an economy that leaves and one can trust“, has also estimated the spokesperson of the government.
It was the good news of the day. The staging was neat and it is the vice-president Nuihau Laurey, who came in person to announce it, at the end of the press point of the Council of ministers. The information bruissait for several days in the halls of government, without that nothing official has been published by Moody s. Everything has been formalized in the mid-day when the long-term rating of French Polynesia was officially raised to Baa1 with a stable outlook.
“Some representatives of the opposition may wish to refer to the site misère-à-tahiti.com available every evening during the neighborhood meetings“, ironisé Nuihau Laurey, Wednesday. But he also pointed out that the effects of virtuous improvement of the economic situation of the Country, of which this rating is only a reflection, could be observed, since 2014 on the job with “the first positive change of the curve of employment in the last 10 years” observed by the statistical Institute (ISPF).
For the financing of the investment budget of the fiscal year 2017, the Baa1 ” with a stable outlook awarded by Moody’s is as synonymous to loans easier to find and much less expensive.
Specifically, it allows “one more accessibility to the donors, with better rates of interest“, said Nuihau Laurey. “This is a situation which is already benefiting the community and that should get even better with this re-evaluation of the financial note. I want to show the loan that we signed with the AFD (French development Agency, editor’s note) for the construction of the mental health : Are we prepared to 1.7 %, while the average loan made prior to 2012 was around 4.5 %. This is a decrease really significant. And in purely factual terms, we realize the fiscal years 2016 and 2017 economy in interest expense and debt repayment of approximately $ 1.5 billion. You already begin to feel, on the Country’s economy, the effects of our policy of debt reduction. Between 2014 and 2017, it will be of the order of 10 billion : we were at 94 billion in 2014, and we’re going to go to $ 84 billion next year, with a real impact on the budget“.
Another advantage is that, in the coming months : the re-evaluation of the rating by two notches to facilitate the entry of the Country in the Agence France locale (AFL) in 2017. “For the mobilisation of loans of Polynesia, we will be able to rely on the Caisse des dépôts et consignations, on the AFD and the AFL,” stresses Nuihau Laurey. “the three institutional funders will constitute almost 90 % of our capacity for mobilization in 2017. It is for this reason that I speak of securing our access to external financing“.
The improvement of Baa1 to the French Polynesia in A3 (A – at Standard & Poor’s) will be linked to the effectiveness of the measures put in place by the community, by 2019, to deal with the structural deficit of its social protection system generalized (PSG), the diversification of its economy and its continued debt reduction.
The outlook is stable, but strong budgetary performance are expected in the next three years by the financial ratings agency, in particular regarding control of expenditure, in a context where tax revenues are expected to increase slightly. While the rate of self-financing of the community is expected to increase in the coming years, the French Polynesia must be put to use to reduce its debt level, to 74 % of its resources compared to 86 % in 2015.
In this context, a decrease more rapid rate would have a positive effect on the financial rating of the community, warns the agency Moody’s, which also stresses that any downward revision of the sovereign rating granted to France (Aa2) would have a negative impact on the credit ratings of French Polynesia.
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