Standard & Poor’s (S&P) has revised downwards the long-term rating for Barbados, the second downgrade in four months.
Late this afternoon, the United States-based credit rating agency announced that it had moved the island’s rating from BB-plus to BB-minus in response to a persistent current account deficit and a high fiscal deficit.
Minister of Finance Chris Sinckler could not be reached for comment but a senior Government economist reacted swiftly saying: “This is certainly not good news for us. It will obviously make it more difficult for us to borrow, which is the most significant part for us, given our recent efforts to go to the international capital market.”
Former president of the Economic Society, Ryan Straughn, also reacted to the news saying “it is not a surprise”. In fact, he suggested that the writing had been on the wall for some time since Government did not go ahead with the expenditure cuts announced by the Minister of Finance in the August 2013 Budget.
Straughn, who met with a visiting team from S&P two weeks ago, warned that tough decisions now had to be made and he called on Government to “bite the bullet and make the necessary cuts now”.
Back in July, S&P had revised the outlook on its long-term rating for Barbados to negative from stable.