All Barbados Must Remain Focused In The Face Of Moody's Downgrade

Press statement from an official at the Ministry of Finance


Chris Sinckler, Minister 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.

121 thoughts on “All Barbados Must Remain Focused In The Face Of Moody's Downgrade

  1. @Technician | June 16, 2011 at 4:10 PM |

    Can anyone guess what the middle C stands for

    Tecchie ask Bonny ……..she had a good one for Tina and it started with a C too

  2. Owen Arthur is a very opportunistic politician and does not care who is pushed out of the way for him to be Prime Minister again. He pushed Mia out of the way when he got inside information that David Thompson was dying.
    He now is on the band wagon of downgrades. He saw blood on moody’s release and called for the resignation of the Central Bank Governor and Minister of Finance totally ignoring the support given to the government by Standards and poor’s and the IMF earlier in the year.
    Today in a press conference he caught with his pants down again when Standards reiterated what they said earlier and he is now the great explainer of how these agencies work and how the government should not take comfort in standard’s analysis.
    He has said in the past to not be bothered by these agencies and he put the IMF out of Barbados. His economic advisor Mascoll also said on VOB brass tacks to forget about these agencies and get on with the job of managing the economy. Why is he now following them? All political blood sport.
    After fourteen years and not a policy to lead us away from this trouble and now he wants to be the great savior.
    Let the BLP supporters who are honest say to the public servants the best way to cut government expenditure right now is to lay off some of you. They want this government to do it and then say it is 1991 all over again.

  3. What Owen”seethru”Arthur is hoping for is that lightning will strike the sameplace twice.

    He and his split in two Barbados Labour Party is hoping for the destabilisation of Barbados by their unpatriotic stands on matters, but the BLP crooks are wasting their time.

  4. @ David

    They can’t offer any serious alternative ideas/strategies because they don’t have any that the European, US and Chinese haven’t suggested. They sound/seem impressive till a Google check is done on what they say/write. I remember
    years ago while on vacation on the ‘Rock’, I attended a political meeting in the Orleans and heard Errol Barrow say that Bajans read Tony Cozier’s father’s
    newspaper at night as though it was the Bible and accepted it as the Gospel. Things have not changed apart from their reading of the Nation Newspaper and believing everything they print. I am suggesting that those of us who are privileged to have the Internet servicce, to read other newspapers/magazines and digest the data which are available . Don’t wait for the Nation to select what best suits their interests. I will give you a few url’s to enjoy.

  5. Miss Observer

    “Presently your government is in control and you are getting some of the fatten calf”

    I have no idea what you are talking about. All over the world people are feeling it.

    Under the Democratic Labour Party, Barbados is coping better than most. The problem with you is that you believe that the world begins and ends in Barbados.

    I think that you better wake up and smell the coffee.

  6. @David: “Even India, one of the worlds top 5 economies seems to be labouring as well. Interesting times indeed.

    And yet China doesn’t seem to be having any trouble they can’t manage.

    Anyone who discounts the Chinese ability for patience is doomed to be their servant….

  7. The question must be what impact t the decisions/policies of the current government had on the economy. Did they exacerbate or temper the situation?

  8. The more important questions given the need for a budget so soon after the last one, is;

    1. Will there be lay-offs in the Public Sector given the need control government expediture?

    2. Is there a risk of a de-valuation of the Barbadian currency?

  9. PH likely to reduce deficit to 2 percent of GDPFebruary 13, 2011, 12:22pm
    MANILA, Philippines (Xinhua) –

    The Philippine government is expected to achieve the target of reducing its deficit to 2 percent of gross domestic product (GDP) in the medium-term following a lower-than-expected fiscal deficit in 2010, a senior government official said Saturday.

    Budget and Management Secretary Florencio Abad said that based on preliminary figures, the 2010 ratio has improved to 3.6 percent from 3.9 percent in 2009.

    In absolute terms, the preliminary fiscal deficit for 2010 stands at 310 billion pesos (7.12 billion U.S. dollars), 4.6 percent lower than the programmed deficit of 325 billion pesos (7. 47 billion dollars), he said.

    “Based on the preliminary figures, the Aquino administration has kept within its deficit target for 2010 because of improved revenue collection in the latter part of the year, coupled with our consistent exercise of prudence in public expenditure management,”he said, noting that the final figures will be presented to the public next month.

    The economic manager said that last year’s preliminary performance is better than the target of 3.9 percent of GDP. With this, he said that it is possible to achieve the immediate goals of reducing the deficit versus GDP to 3.2 percent in 2011, 2.6 percent in 2012 and 2.0 percent in 2013.

    On the revenue front, Abad said, emerging revenue collections for 2010 amounted to 1.207 trillion pesos (27.7 billion dollars), a year-on-year increase of 7.5 percent.

    He attributed the improved performance to increased tax and customs revenues by 9.6 percent and 17.6 percent, respectively, over the performance in the previous year.

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