STANDARD & POOR’S Ratings Services (S&P) today lowered its long-term sovereign credit ratings on Barbados to 'B' from 'BB-' with a negative outlook.
However, the agency also affirmed its 'B' short-term sovereign credit ratings and lowered the transfer and convertibility assessment to 'B' from 'BB-'.
In a release, S&P said the downgrade reflected continued large fiscal deficits, a high debt burden that continues to rise, and narrower financing options.
The agency pointed out that despite various adjustment efforts on both revenues and expenditures,
Barbados' fiscal accounts remain under pressure with ongoing large deficits, a high debt burden that continues to rise, and narrower financing options.
“GDP growth could turn a corner next year with increased investment in tourism projects, but it is likely to remain low, limiting prospects for revenue growth.
S&P also said the negative outlook reflected the potential for a downgrade if recent measures fail to gradually stabilize the debt burden, if tourism investment projects fail to support a turnaround in growth, or if external pressures mount. (NB)
The full statement is available here.