International credit rating agency Moody’s has upgraded its outlook for the Manx economy.

Moody’s has kept the credit rating as Aa3 but upgraded the outlook from negative to stable.

This announcement mirrors Moody’s recent change for the UK government from Aa3 negative to Aa3 stable.

In its latest credit opinion update report, the agency highlighted the island’s diverse economy, the Manx government’s credit strength and ability to comply with global tax standards.

Acknowledging the strong institutional, economic and financial ties between the Isle of Man and the UK, Moody’s expects a tightening of fiscal policy across to support efforts to bring down inflation there.

In turn, the report notes, 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.

And Moody’s said the government’s economic strategy demonstrated 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, we are ready to respond in step with our counterparts in the Channel Islands.’