CariBB Regional Scale Local Currency
CariBB – Regional Scale Foreign Currency
bbAAA Barbados’ National Scale Local Currency
TRINIDAD / BARBADOS – Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the regional scale ratings on the Government of Barbados (GOB) of CariBB (Local Currency) and CariBB- (Foreign Currency), with a stable outlook. The ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean is below average.
The ratings of the GOB are supported by: (1) fiscal consolidation continues despite COVID-19 pressures and other unanticipated shocks, (2) comfortable and growing foreign currency reserves, (3) good financial sector stability indicators, and (4) strong tourism fundamentals suggest robust post-COVID-19 rebound potential. However, the ratings are tempered by: (1) high debt to GDP, and (2) uncertain economic recovery.
CariCRIS has also maintained a stable outlook on the ratings. The stable outlook is based on our expectation of successful realignment of the home-grown Barbados Economic Recovery and Transformation (BERT) programme that will reduce debt to GDP to 60 percent by 2035/36 and introduce more stringent fiscal planning and accountability. CariCRIS could upgrade our rating opinion as BERT objectives are achieved; however, the stable outlook balances the preceding with the challenge of creating sustained and moderate economic growth as well as current risks to achieving a post-COVID-19 economic recovery, such as, the emergence of new variants that stifle tourism as well as vaccine hesitancy hindering herd immunity.
About the Sovereign
Barbados is the most easterly island of the Lesser Antilles in the Caribbean. The island is twenty-one (21) miles long and has a maximum width of fourteen (14) miles, covering a total area of 167 square miles. The island is relatively flat and rises gently to the central highland region known as Scotland District, with the high point being Mount Hillaby (1,120 ft above sea level). The land slopes in a series of terraces in the west and goes into an incline in the east. A large proportion of the island is circled by its ecologically important coral reefs. Erosion of limestone in the northeast has resulted in the formation of caves and gullies. The population of Barbados is 287,000 (2019 estimate) and is one of the world’s most densely populated islands making it susceptible to environmental impact pressures as it has a lower than world average biocapacity.
Barbados gained independence from the United Kingdom on 30 November 1966 and 55 years later became a Republic. The head of state is Dame Sandra Mason and the prime minister is the Mia Mottley.
Historically, the economy of Barbados was dependent on sugarcane cultivation; however, from the 1980s it transitioned to tourism, financial services and manufacturing. More recently, offshore finance and information services have become important sectors and foreign exchange-earners.
