Falkland Islands gets first sovereign credit rating
Prior to 2020, the Falklands had virtually no sovereign debt, but its plans to upgrade the port in the capital Stanley mean it is expected to borrow roughly 60 million Falkland Island pounds ($85 million) this year.
Argentina and Britain have long disputed ownership of the Falklands, with Argentina claiming sovereignty over the islands it calls the Malvinas. The dispute led to a brief war in 1982.
The planned borrowing for the port will leave the islands’ debt-to-GDP ratio - the standard metric of fiscal health - at roughly 21%, S&P estimated.
Its new A+ rating puts the Falklands, which has a population of just 2,563 according to the government's website here, in line with China and Japan.
The Falklands sit about 480 km (298 miles) northeast of the southern tip of South America. Fishing accounts for around half of its $300 million GDP, which along with oil and gas exploration, helped propel economic growth by 11% a year on average between 2009-2018.
The economy ground to a halt last year when COVID-19 hit sectors such as tourism. The departure of the United Kingdom from the European Union has also presented a challenge because it has led to tariffs on the territory’s fish exports.
In contrast with several other small overseas territories, the Falkland Islands does not receive any direct budgetary assistance from the UK. (Reporting by Marc Jones; Editing by Karishma Singh)