Barbados government anticipates improved rating after S&P review
Monday February 14 2011 | 05:30 AM

GOVERNMENT is anticipating an improved rating for Barbados once Standard & Poor’s, the international rating agency, undertakes a review of the country’s macro-economic fundamentals.

So says Finance Minister, Christopher Sinckler, during an interview with Business Monday.

Sinckler, who on Saturday revealed that the Barbados economy recorded growth of under one per cent based on revised economic data, said a team from Standard & Poor’s is due in the island later this month to carry out an assessment and that he is looking forward to it.

“They are sending a team down here and I feel reasonably comfortable that we should get a better report than last time,” he affirmed.

That level of comfort stems from the defensive measures which the Government, under Sinckler, instituted last November to shore up the country’s fiscal position which had become a hotly debated issue with some commentators insisting that the present administration cut expenditure.

Last October Standard & Poor’s lowered Barbados’ sovereign credit rating to BBB-minus on the basis of the island’s growing debt burden and delays in implementing fiscal policies to contain a growing deficit. The downgrade reflected the continuing weakening of the country’s fiscal profile, Standard & Poor’s had said in the news release explaining the reasons for its action.

“Our major challenge is on the fiscal side and that is why we have had to deal with the cash flow position,” said Sinckler referring to the Budget. That package included additional revenue-raising measures like a higher Value Added Tax (from 15 per cent to 17.5 per cent), trimming allowances, adjusting the excise on gasoline and increasing bus fares.

The measures, which are aimed at raising just under $150 million in revenue, also seek to lower the fiscal deficit by at least 2.5 per cent points, Sinckler said back then.

He reported on Saturday that led by the Value Added Tax, the revenue position had improved during December last year and again in January this year. “So we are expecting a better fiscal position and the reliance on the market to finance our deficit will decrease,” said the Minister of Finance.

A lower deficit is also projected in 2011, and some expenditure trimming will be revealed in the Estimates of Revenue and Expenditure to further that process, the Minister added.