Barbados drops 3 notches
UNIMPRESSED WITH GOVERNMENT’S efforts to cut costs, Moody’s Investors Service yesterday downgraded Barbados’ bond rating by three-notches – from Ba3 to B3, with the outlook remaining negative.
And it warned that Barbados was moving to the point where it would have to decide between servicing external debt and maintaining the value of the currency to the United States (US) dollar.
Moody’s said its actions reflect the reinforcement of negative fiscal trends given the increasing size of the country’s fiscal deficit, which exceeded 11 per cent of Gross Domestic Product (GDP) in the 2013/14 financial year, and their expectation of continued challenges to Government’s efforts at fiscal consolidation.
They also cited increasing Government debt ratios projected at above 100 per cent of GDP by 2014/15 financial year, coupled with elevated short-term debt issuance and gross financing needs in excess of 30 per cent of GDP in 2014 and 2015.