Above: Barbados (CJ Photo)
By the Caribbean Journal staff
Barbados has seen its sovereign credit rating lowered again.
New York-based Standard & Poor’s lowered the country’s long-term sovereign credit ratings to “B” from “BB-“, the ratings firm announced Friday.
The country’s outlook is negative, according to S&P.
S&P lowered the country’s credit rating in November 2013. At the time, it warned another downgrade could occur if “investment and growth prospects fail to strengthen and external and fiscal
pressures continue to complicate financing.”
“The downgrade reflects continued large fiscal deficits, a high debt burden that continues to rise, and narrower financing options,” the firm said in a statement. “Financing this larger deficit has become more difficult in both local and external capital markets, leading the government to rely on official and central bank financing, and some drawings on the sinking funds.”
S&P said that Barbados had a “stable, predictable, and mature political system, which has traditionally benefited from consensus on major economic and social issues.”
But it noted that “While there is support and acknowledgment of the need for adjustment, private-sector confidence in the government’s ability to deliver appears mixed.”
It also said that Barbados’ “economic fundamentals remain weak,” “reflecting not only subdued global economic conditions, but also competitiveness and other structural shortcomings.”
“Its narrow and open economy has continued to suffer since the 2008 global financial crisis,” the firm said.
The country’s economy is driven in large part by tourism, and the firm said it expected to see investment in the tourism sector pick up.
But it warned that “some uncertainty about the timing and extent of new projects.”
Barbados is slated to get a boost by two major new Sandals resorts: a Sandals and a Beaches, with the former set to open in January.
Barbados’ government has also announced the construction launch of a Hyatt hotel, although Hyatt has not confirmed that project.