A regional ratings agency is the latest to back the continued rise of Barbados’ sovereign credit ratings.
Improved fiscal performance, a healthy international reserves, strong tourism numbers and a stable financial system have resulted in the Caribbean Information and Credit Rating Services Limited (CariCRIS) reaffirming the credit ratings.
The Trinidad and Tobago-based agency said it was reaffirming the regional scale ratings of CariBB for the local currency and CariBB- for the foreign currency, with a stable outlook.
CariCRIS said: “Our decision to maintain a stable outlook on the ratings is based on the likelihood of a low growth scenario over the next two years that keeps Barbados in its current rating category despite fiscal improvements, and two, though reserves have stabilized at an above adequate level, core foreign exchange earnings (or non-International Monetary Fund inflows), especially foreign direct investments, still display some weakness.”
It said the ratings reflected improving fiscal performance, rebound in net international reserves, good tourism performance, which it said was likely to help the economy return to growth, and the continued health of the financial sector, despite the negative impact of the Government’s debt restructuring.
“Additionally, The Government of Barbados has successfully finalized its foreign currency debt restructuring programme,” it added.
But CariCRIS pointed out that the ratings were “tempered” by the high and unsustainable debt-to-gross domestic product, though it has been declining, and the economy’s low growth and unemployment challenges.