CariCRIS Upgrades the Government of Barbados’ Credit Ratings by One Notch

• CariCRIS has upgraded the Government of Barbados’ (GOB’s) sovereign issuer credit ratings by one notch to CariBBB (Regional Scale Local Currency), indicating an adequate level of creditworthiness relative to other Caribbean obligors.

• The upgrade reflects significant improvements in GOB’s credit risk profile, including a decline in the debt-to-GDP ratio, which fell to 105.6% in September 2024 from 108.7% a year earlier and 120.7% in 2022, strong, broad-based GDP growth, led by tourism, business services, and construction activities. 

• The positive rating also considers Barbados’ tourism arrivals exceeding pre-pandemic levels, with continued momentum expected, and the successful completion of the IMF’s Extended Fund Facility (EFF) and subsequent access to the Resilience and Sustainability Trust (RST) programme, reflecting Barbados’ strong commitment to IMF benchmarks.

• The primary balance improved to 4.0% of GDP as of September 2024, ahead of expectations, and is projected to remain robust in the medium term. Additionally, gross international reserves are very strong, providing more than seven months of import cover and external debt repayment support. The stable outlook reflects a balance between expected primary surpluses to manage debt and modest medium-term economic growth.

(Source: CariCris)