Although Barbados is repaying a mountain of Government debt and its fiscal deficit remains far too wide, the island’s fixed exchange isn’t under threat.
And it is not facing a balance of payments crisis.
Those assurances have come from Richard Francis, Standard & Poor’s (S&P) lead analyst on Barbados. However, he told the SUNDAY SUN that the Wall Street credit rating giant wanted to see more aggressive action taken by Government to reduce the debt and cut the fiscal deficit.
“If the exchange rate was under threat, we would have a much lower (credit) rating,” for Barbados, said Francis in an exclusive interview in New York. “It is not under threat right now.”
He said the fall-off in the collection of the value added tax (VAT) was a “worrisome trend” because if it wasn’t reversed, its impact on the fiscal deficit and Government’s ability to balance the budget, “not this year but the next”, could prevent the Freundel Stuart administration from achieving its financial goals.
