FRENCH POLYNESIA CREDIT RATING DROPS

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Recession, political instability cited

PAPEÉTE, Tahiti (Tahitipresse, April 22, 2010) - Standard & Poor's announced Thursday that it lowered French Polynesia's rating from BBB-plus to BBB-minus with a negative outlook stemming both from recession and political instability.

French Polynesia's rating reflects the fact that France still provides a substantial yearly financial aid.

French Polynesia's debt is also moderate compared to many other countries.

But Standard & Poor's Ratings Services stressed the fact that Tahiti is plagued by "chronic political instability".

The Tong Sang administration completed last November is the 12th government since 2004, when chronic political instability began in French Polynesia.

The number 12 includes cabinet ministry reshuffles over the past five years as well as nine new governments.

Standard & Poor's Ratings Services added that French Polynesia is going through a severe economic crisis.

After ten years of growth, French Polynesia's Gross National Product (GNP) went down 3 percent in 2008 and 2009.

Joblessness significantly rose in 2008 and 2009 and this affected consumption.

Furthermore, the French Polynesian government anticipates substantial tax revenue shortfall for 2010 due to the economic crisis.

Standard & Poor's had already placed French Polynesia's BBB+ long-term issuer credit rating "on CreditWatch with negative implications" amidst a "recessionary environment" last November.

This rating came after the Temaru government was toppled by the pro-autonomy coalition led by Gaston Tong Sang.

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