Moody warns Barbados against possible economic downgrade

International credit ratings agency, Moody’s Investor Service has warned that mounting government debt could lead to a possible downgrade in the economic assessment for Barbados.



Moody’s says its reviewing the island’s foreign- and local currency bonds in light of the growing level of public debt.



It also warned that the country’s ability to cover its debt is likely to worsen in the coming years.



At present, Barbados has a favourable local currency rating of A3, while its foreign currency rating is Baa2, at the lower end of the scale for investment worthy bonds.



Alessandra Alecci, a senior analyst with Moody’s, says the island’s credit situation has been deteriorating in recent years, starting even before the beginning of the global downturn.



She pointed out that public debt has more than doubled since 2000, and by the end of next year may exceed 100 percent of its economic output, compared with 65 percent in 1999.