Apr 2012 Financial News

On track (Barbados)

Apr 30, 2012

BARBADOS has been moving to fix the three major concerns which international rating agencies have about Barbados.

Governor of the Central Bank of Barbados, Dr. Delisle Worrell, made these comments while fielding questions from the media on the likelihood of a downgrade for Barbados.

“We did what is called a road show at the end of March where we went to London and New York to meet with investors and with the rating agencies,” Dr. Worrell said.

Noting that their concerns are threefold, the Governor said that in the first place they are worried about Barbados’ debt to GDP ratio. He explained that while it is higher that they would like, “we have now used the international recom-mended definitions for Government debt and the ratio is actually much less than 100 per cent.”

Stating that Barbados’ debt to GDP is 74 per cent, Dr. Worrell said they took that message that the debt is not as high by international comparisons as had previously been thought.

Another point of concern was that the Barbados economy would not able to achieve the target of the Medium Term Fiscal Strategy (MTFS). “We were able to say to them absolutely we are exactly on target; in fact, we are ahead of target,” he pointed out.

Said the Governor, “This is a major achievement of the Government as it is a major consolidation, the fiscal deficit has been reduced by $300 million and that is a major adjustment.”

The third concern was about economic growth. “We were able to say to them we live in the real world and we are a foreign exchange driven economy and it is nothing that we can do in 2012 that can increase our growth rate in 2012.”

The Governor said, “The things we can do will use up foreign exchange and put us in a worse situation. We have to invest in 2012 to create the growth in the long term. We are securing sustained growth for the long term.”


Source:
By Nadia Brancker
Barbados Advocate
Monday April 30, 2012

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=24375