RBC Caribbean Economic Report: Barbados economy slipped back into recession
From News T&T
The S&P downgrade from BB+ to BB– with a negative outlook, is based on weak and deteriorating external and fiscal balances in the face of external financing challenges (such as the recent failed US$500 million bond issue) and rising sovereign debt levels.
The economy has slipped back into recession, and international reserves have declined to almost two months of current account payments, according to S&P’s press release.
The negative outlook reflects a greater than one-in-three chance of another downgrade if external and fiscal balances continue to deteriorate and further complicate financing. The Central Bank’s online statistics show international reserves falling to roughly US$487 million in October 2013, which we estimate at just over 12 weeks of import cover. Reserves were last at this level in 2000.
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Caribbean credit rating agency downgrades Barbados again
From Stabroek News
(Barbados Nation) The Caribbean’s lone credit rating agency has downgraded Barbados, saying that the island’s economic performance for most of this year was disappointing and the prospects for growth in the country are not apparent.
Caribbean Information and Credit Rating Services Limited (CariCRIS), which is based in Trinidad and Tobago, said on Tuesday that it dropped by two notches the island’s rating on the Government debt issue of Bds$600 million to CariA- from CariA+ and a CariA on the local currency down from CariAA-.
CariCRIS’ downgrade follows on a series of downgrades that the island has received over the past two years from international rating agencies Standard & Poor’s and Moody’s.
The agency’s chief executive officer Wayne Dass said: “The downgrade of the Government of Barbados’ ratings is driven by the below expectations performance of economic growth, fiscal containment and the external position.”
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