An international organisation that rates countries according to their creditworthiness has given the Isle of Man a thumbs-up.
Moody’s has affirmed the island’s credit rating as Aa3, while changing the outlook from negative to stable.
The ratings agency’s verdict considers the island to be ‘high quality, very low credit risk’, whilst upgrading the island’s outlook from negative to stable.
The Isle of Man Government’s credit strength, diverse economy and ability to comply with global tax standards were all noted in Moody’s Credit Opinion Update report.
Tom Richards, head of wealth management at Canaccord Genuity Isle of Man, said: ‘This rating is important for the Isle of Man’s international standing and, of course, the finance sector.
‘It reflects the economic strength of the Isle of Man and its governance, and the quality of businesses established here.
‘It is particularly welcome news during the current challenging global economic environment and shows the determination and commitment of our government and industry to perform at the highest level.’
While the rating might be painted as reassuring, it’s still not as strong as it once was.
Amid the turmoil of the Brexit referendum, the Isle of Man’s credit rating was cut in 2017 after similar measures were applied to the UK.
Moody’s downgraded the island to an Aa2 from Aa1, citing continued instability and uncertainty over the Brexit process.
In 2020, it dropped to Aa3, again mirroring the situation in the UK, which has the same rating.
Aa3 is still a good marker. However, it is below the Aaa ratings for many big countries.
For example, Germany, Switzerland, the Netherlands and the European Union (as a whole) get the top score.
Ukraine’s Ca appears to be the lowest in Europe, although some countries including Russia aren’t measured.
The Channel Islands do not appear to be rated at all by Moody’s.
Treasury Minister Dr Alex Allinson MHK said: ‘The latest report from Moody’s is a welcome assessment of the progress being achieved and efforts being made to both protect and develop the Isle of Man’s economy.
‘Expanding the island’s workforce is a central aim of Our Island Plan and the initiatives being put in place to achieve this are noted in the report.
‘While we are seeing more jobs being created on the island, there is much more work to be done in this area through attracting and retaining new workers.
‘The island has bounced back from a range of challenges in recent years and must continue to adapt and innovate.’
He added: ‘We know that changes to global tax standards are on the horizon and, as the report states, are ready to respond in step with our counterparts in the Channel Islands.’
Moody’s is an international credit rating agency based in New York that carries out research and analysis to evaluate a country’s economic and political environment before awarding it a rating, which is used by investors globally when making decisions where to conduct business.