International ratings agency Standard & Poor’s (S&P) has maintained its long and short-term credit ratings of B-/B with a stable outlook for the Barbados economy.
“The stable outlook reflects our view that the COVID-19 pandemic will have a significant impact on Barbados’ economy and that the recovery will be more subdued than anticipated,” S&P said.
The ratings agency pointed out that while the impact of the pandemic would worsen fiscal and external balances, the debt restructuring completed last year and financing from multilateral institutions would help to limit Barbados’ near-term payment risks.
It pointed out that policy based funding and international reserve levels would sustain external liquidity despite a higher current account deficit expected in 2020. The agency said: “A delayed economic recovery will result in increased fiscal pressures during the outlook horizon. The country will face rising expenditures due to health-related spending in the face of lower tourism receipts.” (BT)
Extract from CARICOM BUSINESS Vol 3 No 45
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