Bermuda’s economy continues to show resilience and steady performance, according to a new report from S&P Global Ratings, which this week affirmed the island’s long-term sovereign credit rating at ‘A+’ and short-term rating at ‘A-1’. The outlook remains stable.

S&P said the decision reflected confidence in Bermuda’s economic stability and the Government’s handling of recent changes to its tax regime.

“Steady performance in Bermuda’s key insurance industry, along with the smooth implementation of the new corporate income tax, will support fiscal consolidation and lower government debt,” the agency said in its May 13 report.

That corporate tax, a 15 per cent levy on large multinational companies introduced in January, was implemented in response to global minimum tax rules set by the Organisation for Economic Co-operation and Development.

The first instalment is due in August.

S&P expects it will create a “new revenue stream” that boosts government income, lowers interest costs and helps repay debt over the next few years.

The report points to Bermuda’s international insurance and reinsurance sector as a key pillar of the economy, contributing about $2 billion annually, or nearly 29 per cent of GDP. But it also highlights Bermuda’s vulnerability to shifts in that industry, especially as the country remains heavily reliant on it.

Still, S&P was optimistic about Bermuda’s ability to manage those risks.

“We believe this, together with prudent institutions and a wealthy economy, will somewhat insulate Bermuda from the effects of shifts in global trade and elevated market volatility.”

The ratings agency also praised the government's effective and predictable policymaking, pointing to the Progressive Labour Party’s continued leadership after its third consecutive election win in February. The stable political environment, strong external asset holdings and a track record of economic reform all contributed to the positive assessment.