NEW YORK, Dec 20 (Reuters) - Moody’s Investors Service on Thursday downgraded Barbados’ credit rating to Ba1, into junk territory, citing the Caribbean country’s lukewarm economy and rising government debt levels.
The rating also carries a negative outlook, with the agency saying that the country’s economic prospects remain weak.
“Moody’s believes that the country’s growth prospects remain very limited due to its deteriorating competitiveness and declining productivity coupled with heavy dependence on tourism, particularly from the United Kingdom and the United States,” Moody’s said in a statement.
“While the worst appears to be behind Barbados both in terms of fiscal deficits and economic deterioration, Moody’s anticipates that the government’s deficits will remain large for the next few years and its debt levels will continue to rise, albeit at a slowing pace,” the statement added.
Standard & Poor’s rates Barbados BB-plus with a stable outlook, also a speculative rating.