S&P Global Ratings has affirmed its AA-/A- 1+ long- and short-term credit ratings for Guernsey, stating that the outlook for the jurisdiction remains stable.
S&P projects that Guernsey's economy will post a strong recovery in real GDP of 4.8% in 2021, and that the government deficit peaked last year at half of what was forecast.
The bailiwick's response to Covid-19 is factored into the ratings decision, which notes how much of the economy was able to return to normal trading in the middle of 2020.
But it also points to uncertainties ahead, not only in relation to the pandemic but also in the future relationship between the UK and EU following the end of the transition period.
Deputy Mark Helyar, the Treasury lead for the Policy & Resources Committee, said: "This ratings decision reflects how well our community has handled its response to Covid-19.
"Being able to remove our lockdown restrictions and return to a relatively normal life has helped many sectors and minimised the impact on the island's finances."
Jersey rating
S&P also confirmed that Jersey's long- and short-term sovereign credit ratings remain unchanged and the outlook for Jersey is stable. The island's credit ratings remain at AA-/A- 1+.
S&P notes that Jersey's ratings are based on Jersey’s “strong and flexible institutions, wealthy economy and considerable fiscal buffers”.
It also projects that Jersey’s economy will recover by 3.2% in gross value added in 2021 as the vaccination programme is rolled out and activity that has been paused restarts.
The Minister for Treasury and Resources, Deputy Susie Pinel (pictured), said: “We are pleased that our credit ratings remain unchanged, and that S&P recognises the value of Jersey’s policies, aimed at helping economic activity to recover.
“We are, however, very aware that in responding to the current health emergency and the impact this has had on our economy, we will be running deficits over the next few years, although these deficits will be offset by returns on our significant assets.”