Press statement from an official at the Ministry of Finance
The recent decision by Moody’s to adjust Barbados’ domestic Credit rating downward coming as it is just weeks after Standard and Poors using the same information issued a review holding the country’s rating, is both disappointing and surprising.
Disappointing from the perspective that while it recognises the country’s efforts at fiscal consolidation as evidence by the initiatives taken as late as the last budget and more recently in the expenditure restraints in the 2011-12 estimates, it does not sufficiently credit these efforts in the government’s quest to reduce its fiscal deficit and ease debt burden over the medium to long term.
Equally, it is surprising because while correctly holding the foreign debt rating, it curiously ignores the very strong and liquid domestic capital market situation to claim that the system might be unable to support government’s requirements over the short to medium term.
This is clearly a speculative and unnecessary rush to judgment. The evidence is in fact to the contrary. Indeed not only have Government Instruments been eagerly accessed, but consistently oversubscribed. More importantly, the amortization profile for Government’s domestic debt portfolio is relatively smooth, with maturities mostly at the longer end of the maturity spectrum, which aids in ensuring that the domestic debt-service burden is not too onerous.
With this in mind, our government remains focus and committed to working our way out of this tough recessionary period without unraveling the social fabric and economic stability of the country by instituting unnecessary and unreasonable measures that wipe out the social gains of the country and jeopardise the clear signs of recovering which have begun to emerge in the local economy over the last few quarters and that we expect over the course of the rest of 2011. All Barbados must remain focused.