Above: Bridgetown (CJ Photo)

By the Caribbean Journal staff

Standard & Poor’s has lowered the outlook on its long-term rating on Barbados to negative, the New York-based ratings firm announced.

S&P also announced that it had affirmed the country’s “BB+” long-term and “B” short-term sovereign credit ratings.

The firm said the outlook reflected “the potential for a downgrade if the wider fiscal deficit is not reversed or if external pressures associated with persistent current account deficits mount.”

Barbados’s net general government debt is expected to rise to more than 70 percent of the country’s Gross Domestic Product, the firm said, up from 67 percent in fiscal year 2012 and 60 percent in 2011.

Barbados is currently using over 13 percent of its general government revenues to pay interest on its debt.

“Barbados’ economic fundamentals continue to weaken, reflecting not only the tough global economy, but also competitiveness and other structural shortcomings,” the firm said in a statement. “Barbados’ narrow and open economy continues to suffer from the 2008 global financial crisis.”

From 2010 to 2012, Barbados’ GDP averaged a real GDP growth of just 0.4 percent, with an expected contraction of 0.5 percent this year, followed by “a slow recovery in 2014-2015 thanks to tourism and construction (in both the private and public sectors).”