Fitch says ‘stable outlook’ for Barbados’ economy Loop Barbados

Black Immigrant Daily News

Global rating agency Fitch has upgraded Barbados to a ‘B’ – stable outlook.

The New York-based agency made the announcement on Thursday, October 20 via a released statement.

According to Fitch, some of the key drivers to the rating change was strong governance, recovery of the tourism sector, a successfully concluded programme – the Barbados Economic Recovery and Transformation (BERT) – with the International Monetary Fund (IMF) and the recent agreement with the IMF to access the Resilience and Sustainability Trust with an accompanying Extended Fund Facility programme making it the first country to receive a staff-level agreement.

“Barbados’ ratings balance high GDP per capita and governance scores, a strengthened external liquidity position, and a more favorable debt repayment profile following a comprehensive 2018-2019 restructuring, against its vulnerability to external shocks due to its heavy reliance on tourism, high public debt levels and limited appetite for domestic debt from local commercial banks,” said Fitch.

“The rating is supported by the recent IMF staff-level agreement to access the Resilience and Sustainability Trust (RST), with an accompanying Extended Fund Facility (EFF) program, which would underpin reform momentum and alleviate financing constraints, as well as Fitch’s expectation of a relatively quick reduction in the debt burden from high levels in the forecast period,” the statement continued.

Upon the announcement of Barbados’ “stable outlook”, Finance Minister Ryan Straughn held that this is “a step in the right direction”, and highlighted the global confidence in Government’s economic reform plans.

“This afternoon’s credit rating by Fitch demonstrates the confidence in the government macroeconomic programme but more importantly, it represents the sacrifices made by ordinary Barbadians over the past few years.

“After years of downgrades under the previous government, this rating action signals an upgrade which is a step in the right direction when compared to current ratings by other agencies. We are not yet back to investment grade level but this will ease the cost of borrowing for entities operating in Barbados particularly at a time of rising global interest rates,” said the Minister in the Ministry of Finance and Economic Affairs.

“We believe that once we can stay the course and complete the reform efforts under the Barbados Economic and Recovery Transformation Programme 2022 then this Government will be able to see the country through very tough times and, therefore, we ask Barbadians to stay the course,” he added.

NewsAmericasNow.com