The Bahamas government has described as "unfortunate" the latest rating from the international credit rating agency, Standard & Poor's (S&P).

The New York, Wall Street-based firm has downgraded The Bahamas' economic outlook from stable to negative.

"The outlook revision by Standard and Poor's from stable to negative, while unfortunate, is not unexpected," said the Ministry of Finance.

"As S&P clearly articulates in their statement, this administration inherited a deteriorating fiscal situation, where the deficit target was overshot by a wide margin.

"This was in addition to the absence of a credible plan for deficit and debt reduction or taxation reform by the former administration," it said in a statement.

S&P affirmed its 'BBB/A-2' sovereign credit rating and 'BBB+' transfer and convertibility assessment on The Bahamas.

"The government deficit, instead of peaking and starting to decline, rose even further in the fiscal year ended June 2012," S&P said.

"Capital expenditure cost overruns (especially on the New Providence roads project) and continued sluggish growth in recurrent revenue pushed the general government deficit to an estimated more than seven per cent of GDP (Gross Domestic Product)," it added.

"We don't expect the overruns associated with capital projects to moderate until the following fiscal year (ending June 2014), when the deficit could fall towards 4.4 per cent of GDP," the report said.

The Bahamas' finance ministry noted that, over the last five years, the country's deficit as a percentage GDP averaged four per cent.

But S&P said the deficit was actually higher if the sale of government assets were to be categorized as financing as opposed to revenue.

Last November, S&P downgraded the country's sovereign credit rating for the second time in two years, with long-term credit declining from BBB+ to BBB.

In August 2011, Moody's, another Wall Street-based rating agency, revised The Bahamas' outlook from stable to negative, while affirming the A3 government bond ratings.

- CMC