Credit rating holds

Regional credit rating agency Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed Barbados’ credit rating of CariBB for local currency and CariBB- for foreign currency, with a stable outlook.

The Trinidad and Tobago-based agency said the expected performance of the International Monetary Fund (IMF)-backed Barbados Economic Recovery and Transformation (BERT) programme had contributed to the outlook, even though it warned of sustained economic challenges to a post-COVID recovery.

“The ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean, is below average,” CariCRIS said in its release on Tuesday.

“The stable outlook is based on our expectation of successful realignment of the home-grown Barbados Economic Recovery and Transformation (BERT) programme that will reduce debt-to-GDP to 60 per cent by 2035/36 and introduce more stringent fiscal planning and accountability.

“CariCRIS could upgrade our rating opinion as BERT objectives are achieved. However, the stable outlook balances the preceding with the challenge of creating sustained and moderate economic growth as well as current risks to achieving a post-COVID-19 economic recovery, such as, the emergence of new variants that stifle tourism as well as vaccine hesitancy hindering herd immunity,” it added.

CariCRIS noted that the ratings were supported by several factors, including the fact that fiscal consolidation continues despite COVID-19 pressures and other unanticipated shocks, comfortable and growing foreign currency reserves, good financial sector stability indicators, and “strong tourism fundamentals suggest robust post-COVID-19 rebound potential”.

It said the ratings were tempered by high debt-to-gross domestic product (GDP) and uncertain economic recovery. (MM)