Barbados’ economic prospects this year are far from bright, according to Moody’s, a major Wall Street credit rating firm.The experts there have warned that if things deteriorate then it may find itself on the list reserved for those states whose credit rating could be lowered.“Ratings are relative expressions of risk,” Moody’s stated in an economic analysis of the Caribbean published yesterday. “Countries whose key debt metrics are out of line with peers include: the Bahamas, Barbados and the Cayman Islands. Moody’s has observed the greatest deterioration in debt levels in these countries. “Rating downgrade could result if there is additional deterioration in Government debt indicators as a result of poor growth prospects or the inability to undertake substantive fiscal adjustments.”The Wall Street firm explained that despite its troubles Barbados still had an investment grade credit rating of Baa3, along with Bermuda, Cayman Islands, the Bahamas and Trinidad and Tobago.Moody’s forecast that Barbados’ fiscal deficit and its debt profile would remain high, at least for this year while its economy was expected to expand by less than one per cent compared with Trinidad and Tobago two per cent growth and three per cent deterioration in the Cayman Islands.In addition, it warned that as in the case of the Bahamas, the Cayman Islands and Bermuda, Barbados’ offshore financial services sector which was already under pressure could suffer a greater setback.“A multi-year, sustained drop in demand for offshore financial services could have a devastating impact on economies such as the Cayman Islands and Bermuda (where the exposure is greatest) and Barbados among others,” it warned.As for tourism in the Caribbean, the industry was facing increasing competition from low-cost destinations in Central America and given the economic conditions in Europe, a strong recovery wasn’t on the cards this year, a situation that could propel the strong economic headwinds facing the islands. (TB)
