Standard and Poor’s Affirms Barbados’ Investment Grade
Central Bank welcomes Standard and Poor’s affirmation of investment grade of the country’s external debt. We are of course aware that the outlook has worsened. We said so in our most recent report on the economy, at the end of last month. Some adjustments in fiscal stance will be required, in order to maintain the stability of the economy. As the S and P report notes, Barbados boasts strong institutional and social arrangements, political stability and a well-funded NIS, and there is every reason to expect that government will take the necessary measures to protect Barbados’ external credit-worthiness.
The Bank also noted that other leading economic indicators either have remained strong or have improved.
Between January and September 2009, the current account deficit has improved to an estimated 4.3% of GDP, compared to 13.3% for the corresponding period the previous year.
In respect of the Net International Reserves (NIR), it is estimated that by year-end, the import reserve cover will be 20.7 weeks of imports of goods and services; 12 weeks of import cover is the accepted international norm.
Moreover, the country’s debt to GDP ratio, which stands at 52%, compares favourably with that of the United States of America, where the debt to GDP ratio is approaching 100%.
A copy of the S&P release is attached.
November 13, 2009