Aug 2006 Financial News

Moody's sees better days ahead

Aug 28, 2006

A WALL STREET economic report card may not have been laced with upbeat superlatives, but it was probably good enough to be music to Barbados' ears.

That's because Moody's Investors Service, a major credit-rating firm, thinks the country is on course in dealing with two of its thorniest economic problems: its heavy debt burden and the large deficit on its current account. While it did not give a timetable for the reductions it sees on the horizon, the firm's forecast was far more favourable than most other assessments.

"Moody's expects that the Government debt burden, relative to its revenue and to GDP (gross domestic product), will be lowered over time," was the way it was put.

Even though the external account deficit is likely to remain at double-digit levels, Moody's said Barbados' external debt burden would continue to be in line with the average of other Baaa-rated countries.

In an assessment prepared after Prime Minister and Minister of Finance Owen Arthur met recently in New York with Moody's executives, the firm said the current-account deficit, influenced by skyrocketing oil prices, should be in the 11-12 per cent ballpark this year.

Even before Arthur's visit, the company had introduced a new rating methodology (in May) that resulted in Barbados' rating being raised to A1.

The foreign-currency debt ceiling was rated A1; foreign-currency bank deposits, Baa2; Government foreign-currency bonds, Baa2; and Government domestic-currency bonds, A3. (TB)


Source:

Nation News (Barbados)
http://www.nationnews.com/story/363676299652006.php