Barbados credit rating lowered by CariCRIS – The Caribbean’s regional credit rating agency

The Caribbean’s regional credit rating agency CariCRIS has lowered the credit rating of Barbados by “one notch” to CariA+ (Foreign Currency Rating) and CariAA- (Local Currency Rating).

The indigenous Caribbean credit rating agency stated that its downgrade of Barbados’s ratings was driven by the below-expectation-performance of key macroeconomic indicators in 2012, and the non-achievement of targeted improvement in the fiscal performance.

CariCRIS noted that not only was there no growth in Barbados’s real gross domestic product (GDP) in 2012, but there was in fact a reversal of the marginal growth recorded in the previous two years.

While acknowledging that a small return to growth of 0.5-1 percent is expected in 2013, the ratings agency cautioned that this was dependent on the recovery of Barbados’ main tourism markets. Unemployment rose to 11.3 percent in 2012, the highest it has been in over a decade and CariCRIS said it expected unemployment levels to remain high at around 11-12 percent in 2013.

The fiscal deficit in 2012/13 is projected to have remained flat at 6 percent of GDP; CariCRIS projects the fiscal deficit would be around 5-7 percent of GDP for 2013/14 period.

Read more: Caribbean360