Oct 2023 Financial News

Fitch Revises Barbados' Outlook to Positive; Affirms at 'B'

Oct 18, 2023

Fitch Ratings has affirmed Barbados' Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B' and has revised the Rating Outlook to Positive from Stable.

KEY RATING DRIVERS

Positive Outlook: The Outlook revision to Positive reflects the return to large primary surpluses after the pandemic-induced relaxation of fiscal targets, a declining public debt trajectory albeit at high levels, a strengthening economic recovery, and structural reform efforts including ones to state-owned enterprises (SOEs) and the pension system.

Barbados' 'B' rating is supported by high GDP per capita and governance scores (substantially higher than the 'B' median), a strengthened external liquidity position, a more favorable debt repayment profile following a comprehensive 2018-2019 restructuring, and EFF and RSF programs that provide access to financing and underpin reform efforts. These strengths are balanced by vulnerability to external shocks due to its heavy reliance on tourism, high public debt levels and interest burden, and limited domestic financing flexibility.

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Source:

Fitch Ratings

New York - 17 Oct 2023