Above: Bridgetown (CJ Photo)

By the Caribbean Journal staff

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

The country’s long-term credit rating was lowered to “BB-” from “BB+” while Barbados’ outlook was negative.

S&P said the downgrade reflected “mounting external pressures associated with a persistent current account deficit and external financing challenges, as well as the ongoing high fiscal deficit largely because of a substantial fall in government revenues as a result of the weak economy.”

The firm said Barbados’ economic fundamentals continued to weaken, reflecting “competitiveness and other structural shortcomings.”

“Results for the first nine months of 2013 show that Barbados has fallen back into recession after a very weak recovery in 2010-2012, and real GDP per capita has declined on average,” it said.

The firm said it expected real GDP per capita in Barbados to decline by about 0.9 percent in 2013, but to rise next year and move to above 1 percent in 2015, driven by tourism and construction.

S&P said its negative outlook reflected the potential for a downgrade over the next year “if investment and growth prospects fail to strengthen and external and fiscal
pressures continue to complicate financing.”

The firm said it could revise the outlook, however, “if the government is able to adopt measures that significantly reduce fiscal deficits, leading to declining debt and interest burdens, which would lower external pressures as well.”