The Isle of Man Government’s credit strength, diverse economy and ability to comply with global tax standards are all noted in the Credit Opinion Update report on its financial standing from the international ratings agency Moody’s.
The report provides updated analysis of the Island’s economic and fiscal position and sees the Island’s credit rating affirmed as Aa3 while changing the outlook from negative to stable.
This announcement mirrors Moody’s recent change in outlook for the United Kingdom Government, from Aa3 negative to Aa3 stable.
Noting the strong institutional, economic and financial ties between the two jurisdictions, Moody’s expects a tightening of UK fiscal policy to support efforts to bring down UK inflation. In turn, the report notes, this:
'This will feed through to lower inflation in the IoM, and alleviate the downside risks to the IoM's economy and public finances from persistently high inflation which was evident when the outlook was changed to negative in October 2022’.
A proactive approach to policy-making and tackling skills shortages are highlighted as key contributors to the Island’s financial strength and agility, with reference to the Economic Strategy demonstrating a desire to ‘develop the domestic economy, in addition to supporting export sectors’.
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.’
He added:
‘The Island has bounced back from a range of challenges in recent years and must continue to adapt and innovate. 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.’