Credit rating progress welcomed but investment grade ‘still out of reach’

Despite recent credit rating upgrades and steady macroeconomic improvements, Barbados remains below investment grade, a position that can influence investor confidence, an investment advisor said Thursday. 

Ratings Advisory Clinic CEO Kelvin Dalrymple said investment decisions are not based solely on ratings, noting that broader perceptions of economic discipline and policy direction also play a crucial role.  

“Investment is largely a matter of perception, a perception of discipline, and also the evidence of discipline as well,” Dalrymple said. “So, once Barbados continues to put in place policies that improve the macroeconomy and the economy in general, it is anticipated that investment will be attracted to the island.”  

He was speaking to reporters on the sixth Annual Barbados Risk and Insurance Management (BRIM) Conference 2026, held at the Wyndham Grand Barbados.  

His comments follow Moody’s April 2025 upgrade of Barbados’s long-term issuer rating from B3 to B2 with a stable outlook — a move widely seen as strengthening the country’s economic prospects and signalling continued recovery.  

The improvement reflects sustained fiscal discipline under the Barbados Economic Recovery and Transformation (BERT) programme, introduced in 2018 to stabilise public finances, reduce debt and support long-term growth following the fiscal crisis.  

Providing context on the country’s current standing, Dalrymple said: “At this current point in time, Barbados is situated in the B category in all of the three major credit ratings companies in the world. Those are Standard and Poor’s, Moody’s, and Fitch. And at least two of them have positive outlooks, and a positive outlook tells you a bit about the direction of travel of the rating, not only the level.”  

He added: “So it is anticipated that on its current trajectory, if Barbados continues to improve in its macroeconomic context, you could see an improvement of those ratings.”  

Explaining the importance of credit ratings, Dalrymple said they directly influence borrowing costs on international markets.  

“Sovereign credit ratings are largely opinions of creditworthiness, and they determine how much and at what rate you can borrow on the international capital markets,” he said. “So that means that the higher level your credit rating is, the cheaper it is normally to borrow in the international capital markets.”  

He also pointed to the impact of past economic reforms, particularly those implemented under the International Monetary Fund programme.  

“The discipline that would have been engendered from being under an IMF programme should be to the benefit of Barbados and certainly the policies that have been put in place and those that are to come should be credit positive for those credit ratings that Barbados currently has.”  

Dalrymple maintained that Barbados is moving in the right direction but stressed that continued progress depends on consistent policymaking.  

“Well, the direction of travel is positive, and it depends critically on maintaining very good policies, steady policies, and looking out for everything in the country as a whole because it’s not only the financial aspects of it that matter,” he said.  

He emphasised that credit ratings reflect a wide range of national factors beyond government performance.  

“I always think about credit ratings as a whole-of-country exercise. It’s not only the government that’s involved in a rating. The private sector is very much involved. All other actors, the average citizen, should be aware of what a credit rating means and what it is and what it is not,” he said.  

Separately, addressing concerns about government borrowing, Dalrymple said debt must be assessed within a broader economic framework rather than in isolation.  

“The borrowing aspect of it will come into the rating, but borrowing is largely a matter of affordability,” he said. “So the government has to determine how much is affordable at that particular point. You have to look at the sources of the borrowing, whether the borrowing is commercial, what rates they’re borrowing, whether the rates are high, the tenure, over what period of time you have to repay. All of those things have to come into the picture.”  

He declined to offer a definitive assessment of current borrowing levels, describing the issue as evolving.  

“I wouldn’t want to cast judgment on that because I think it’s a dynamic issue,” he said.  

Dalrymple stressed that economic growth remains central to managing debt sustainability.  

“If, let’s for instance, say that GDP grows by a lot, then the debt as a percentage of GDP would be lower. If GDP doesn’t grow and borrowing is high, then government may have to reassess that.”  

He indicated that while Barbados has made measurable progress, sustaining policy discipline and economic growth will be critical to improving its credit profile and attracting stronger levels of investment.