S&P Revises Barbados’s Outlook to Negative

S&P has revised Barbados’s outlook to negative from stable, while also affirming its BBB minus foreign currency rating. Large fiscal deficits and rising debt burdens threaten the government’s credit profile. “The negative outlook reflects our view that downside risks to Barbados’s creditworthiness are increasing as the external financial and economic environment weakens,” says S&P analyst Olga Kalinina in a statement. “We believe that domestic fiscal measures may not be sufficient to stabilize the growing debt burden.” Without fiscal adjustments, net general government debt will probably stay at around 52% of GDP between 2011-2013, while interest expenses will consume 13% of government revenues of up until 2014, the agency adds.