Regional credit rating agency Caribbean Information and Credit Rating Services Limited (CariCRIS) has given Government two reasons to be thankful this Christmas.
The Trinidad and Tobago-based entity yesterday announced a two-notch upgrade of Barbados’ credit ratings and changed the outlook from stable to positive, attributing it to improvements in the country’s credit risk profile.
The news was welcomed by Minister in the Ministry of Finance, Economic Affairs and Investment Ryan Straughn who said it was further evidence that Barbados’ economic trajectory was positive.
Straughn also said that while Barbados was still without an investment grade rating, it was on the way back there and that the implementation of a “strong reform agenda” in 2024 would help.
“CariCRIS has upgraded by two notches the sovereign issuer credit ratings assigned to the Government of Barbados to CariBBB- (regional scale local currency),” the rating agency said.
“Additionally, CariCRIS has aligned the local currency and foreign currency ratings as the country now has significant foreign currency reserves and we assess the risk of the Government of Barbados’ discrimination between local currency and foreign currency debt repayment to be low. The ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean is adequate.”
“CariCRIS also revised the outlook on the ratings to stable from positive. The stable outlook is based on the balance between the anticipated primary surpluses which contain debt and the modest growth expected over at least the medium-term,” it added.
Straughn said the CariCRIS rating review was done last month and that “it just demonstrates that in spite of the challenges that Barbados has faced over the last few years that the trajectory for the economy is definitely in the right direction”.
“And the rating just reflects the work that the Government has been doing to put the macro economic situation back on a sound footing, and we look forward really to executing a strong reform agenda in 2024, for which we will see continued improvement in the credit rating,” he stated.
The minister called the two-notch upgrade “particularly significant, because as you will appreciate, we have worked particularly hard to not just deal with the fundamentals, but it’s really about the confidence that people have in the economy”.
“It is a positive signal, but of course it doesn’t mean that we are out of the woods by any stretch of the imagination, because as you would appreciate, with the potential for conflict amongst our neighbours, then obviously one always has to tread very carefully,” he said.
Straughn also shared that the objective was to work to secure an investment grade credit rating as soon as possible.
“It just shows that we can get stuff back on track and the mission has always been to try to get back to investment grade as quickly as possible. And so obviously having experienced over 20 downgrades in the last decade, then it’s important that the work that we’re doing that we get back up to investment grade as quickly as we can,” he said.
“And therefore this two-notch upgrade is really is significant, but of course we have not yet reached the destination, meaning we have not yet returned to the investment grade credit rating. More importantly, we want to ensure that the growth that is achieved in on our way back there is as inclusive as possible.”
