Moody's Affirms Barbados Caa1 Ratings; Maintains A Stable Outlook

• On July 14, 2021 Moody's Investors Service ("Moody's") affirmed Government of Barbados’ Caa1 issuer ratings and withdrew the Caa3 senior unsecured bond rating. The outlook remains stable. 
• The key drivers behind the rating decision are: fiscal risks have not materially increased despite the severity of the pandemic shock; there are structural reforms to support medium-term growth prospects and fiscal sustainability; and an increased level of foreign exchange reserves supports Barbados' external position. 
• The stable outlook reflects Barbados' high level of indebtedness and subdued growth performance, balanced against strong reform efforts that have reduced fiscal vulnerabilities prior to the pandemic. 
• Despite the severe economic shock, reform efforts have continued and Moody’s expects the recovery in economic activity will support a path of fiscal consolidation similar to that observed in the fiscal accounts before the pandemic, which was associated with high primary surpluses and downward debt trajectory. 
• On the other hand, the speed of the recovery of the tourism sector remains uncertain, which poses risks to Barbados’ fiscal outlook.

(Source: Moody’s Investor Service)