Barbados gets new downgrade warning

(Barbados Nation) Barbados was given a new warning yesterday to get its economic house in order or be faced with a downgrade by Standard & Poor’s.

The international rating agency issued the strong word of caution, while maintaining the island’s BBB-/A-3 rating for creditworthiness but lowering its economic outlook from “stable” to “negative”.

“This reflects the rising risk of a downgrade, should the combination of lacklustre growth and insufficient fiscal adjustment within the next 12 months indicate a higher debt burden or a rising debt service burden that impairs fiscal flexibility,” said S&P credit analyst Olga Kalinina, who has followed the Barbados economy for several years.

She pointed to Government’s large fiscal deficits and rising debt burden, saying they were “not sustainable in the long term and present an increasing risk to the Government’s credit profile, especially in the context of the small, open, and vulnerable economic structure”.

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