Barbados Ratings Reaffirmed by CariCRIS! Find Out Why Here.

Barbados’ Financial Landscape: A Closer Look

Amidst the tumultuous economic climate caused by the Covid-19 pandemic, the Government of Barbados has remained steadfast in its commitment to fiscal consolidation. CariCRIS, the Caribbean Information and Credit Rating Services, recently re-evaluated Barbados’ credit ratings, affirming them at CariBB (local currency) and CariBB- (foreign currency), with a stable outlook. This evaluation sheds light on the country’s creditworthiness in the Caribbean region, portraying it as slightly below average.

CariCRIS highlighted several factors that supported the ratings of the Government of Barbados:
– Continued fiscal consolidation efforts amidst challenges posed by the pandemic and unforeseen shocks
– Healthy growth in foreign currency reserves
– Strong financial sector stability indicators
– Resilient tourism fundamentals indicating the potential for a robust post-Covid-19 recovery

However, the assessment also addressed concerns regarding Barbados’ high debt to GDP ratio and the uncertainty surrounding its economic recovery. The stable outlook is hinged on the successful implementation of the Barbados Economic Recovery and Transformation (BERT) program, aimed at reducing the debt to GDP ratio to 60% by 2035/36 and introducing stringent fiscal planning and accountability measures.

While the path forward seems promising, CariCRIS stresses the importance of sustained and moderate economic growth. External factors such as the emergence of new Covid-19 variants, which may impact tourism, and vaccine hesitancy hindering herd immunity present risks to the country’s recovery.

On a positive note, the International Monetary Fund (IMF) has endorsed Barbados’ efforts, releasing US$24 million to support the ongoing implementation of the BERT plan. The IMF’s endorsement came after the successful conclusion of the Article IV consultation and the sixth review of Barbados’ economic reform program. These funds are vital in bolstering the country’s reserves and executing structural reforms to propel growth.

Looking ahead, the IMF emphasized the need for Barbados to stay vigilant in maintaining sound policies and reform momentum to ensure macroeconomic stability. The authorities must address the lingering impact of the pandemic and unexpected expenditure incurred due to natural disasters. Additionally, Barbados plans to integrate climate change risks into its financial stability assessments, reflecting a proactive approach to future challenges.

As Barbados navigates through uncertain waters, a concerted effort from policymakers, financial institutions, and the private sector is crucial in steering the country towards sustainable growth and stability. By staying committed to their reform agenda and adapting to evolving challenges, Barbados can emerge stronger and more resilient in the post-Covid era.