Downgrade

The ratings agency, Standard & Poor’s (S&P) has revised downwards the long-term rating for Barbados – the second downgrade in four months. Late Wednesday, the United States-based credit rating agency announced that it had moved the island’s rating from BB+ to BB- in response to a persistent current account deficit and a high fiscal deficit. “The downgrade reflects the 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 agency said According to S&P due to the large fiscal deficits, it is expected that the net general government debt burden will rise to above 70% of Gross Domestic Product (GDP) in fiscal 2013 (ending March 2014) from 67% in fiscal 2012 and 60% in fiscal 2011.

Courtesy: www.cananewsonline.com