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BLP knocks government over Moody’s downgrade

The opposition Barbados Labour Party (BLP) has said the latest downgrade of Barbados’ government bond rating by Moody’s Investor Service highlights the flaws in government’s fiscal policy as well as the monetary policy of the Central Bank of Barbados by way of its direct financing of government.

In a statement released this afternoon on the heels of the Moody’s downgrade, economist Ryan Straughn said the downgrade to Caa1 “clearly demonstrates that the Freundel Stuart administration has successfully fooled itself into thinking that the Home Grown Fiscal Stabilisation and Economic Revitalization Programme is working”.

“Barbadians should be aware that Moody’s basis for its ratings action was predicated on their estimate of the fiscal deficit of 5.5% of GDP.

“This is quite significant since the Minister of Finance presented a figure of 6.3% of GDP for 2015/2016 during the debate but further rather than fiscal consolidation, the Freundel Stuart administration approved an Appropriations bill for a deficit of 7.8% of GDP for 2016-2017,” Straughn said, adding that based on Moody’s analysis this will set the country up for a further downgrade “over the next 12 months or so”.

Straughn, who is also the BLP candidate for Christ Church East Central, contended that the island’s fiscal situation is much worse than the basis on which Moody’s predicated their action, “and by the government’s own admission they intend to widen the deficit further rather than to reduce it”.

He noted that although the country enjoyed low oil prices and record tourist arrivals over the past years, the foreign exchange reserves are still under pressure, putting the peg at risk. This, he said, is due to government’s continued reliance on financing from the Central Bank of Barbados.

He pointed out that this is the sixth ratings downgrade by Moody’s since 2009 when the rating at the time was A3.

“However one must remember that in June 2014 under the stewardship of the Minister of Finance Barbados received a triple notch downgrade in the middle of the Home Grown Fiscal Stabilization and Economic Revitalization Programme.

“Despite evidence to the contrary, the Minister of Finance and his colleagues persist in pursuing a path that takes Barbados closer to economic ruin,” Straughn charged.



17 Responses to BLP knocks government over Moody’s downgrade

  1. Lawrence Griffith
    Lawrence Griffith April 2, 2016 at 7:20 pm

    When the government bailout the insurance companies and buying all types of technology. Give subsidies to Sandels Hotels and many more corporations. Putting people in prison for stealing a sweetbread or having a 5 bag, do you expect the economy be great? Both parties have been looting the country for personal gains. Yet people expect the politicians overnight to be honest and start doing the right thing.. Totally impossible..

    • Lawrence Griffith
      Lawrence Griffith April 2, 2016 at 11:54 pm

      They keep telling you that the economy is doing fine and they have things under control but that’s basically a lie. People that believe their government either works for the government or benefits. I am guessing Lauriston Applewhaitelauriston is the spokesman for the BLP.

  2. Sunshine Sunny Shine April 2, 2016 at 7:21 pm

    So what would you do different that would stop the Moody’s downgrade? What are the solutions besides stating the obvious blunders of the circus act that are the DLP clowns.

  3. Lilian Lloyd
    Lilian Lloyd April 2, 2016 at 9:17 pm

    Lawrence Griffith

    • Lawrence Griffith
      Lawrence Griffith April 2, 2016 at 11:58 pm

      Thanks for reminding me Lilian Lloyd, sometimes I just forgets.

  4. Veroniva Boyce
    Veroniva Boyce April 3, 2016 at 3:18 am

    Freundel Stuart and his administration are on cartoon planet ‘mythomania’ they’ve got into the habit of telling factitious stories that they are unable to tell the difference between reality and fantasy. Well said, Lawrence Griffith.

  5. seagul April 3, 2016 at 7:15 am

    The economy of the islands with the cost of living is getting higher and higher—the price of fuel, gas food. The educational system is failing our children. This reality as it is only leads to violence, so let’s clasp our hands and souls together. Let’s work towards a more social, friendly, humanitarian, charitable, educational, institutional, constructive and expansive society, and is founded by persons desiring to do the utmost to work for the general uplift of the people……ajani–Deeper Soul

  6. jrsmith April 3, 2016 at 8:41 am

    The ball was in Bajans court for 3 decades, we never try to work get invoke putting in what we could toward an economic future for the people of Barbados. We depended on foreigners telling us how laid back we are because it was good from them coming in and buying up Barbados. We had 50 years of in (DEPENDENCY)waiting at the cross roads with tin cup in hand , waiting to see who loan sharks would lends us money…

    The trouble with us we have no proper establishment , and the 1% who controls the wealth on Barbados is the ones who keeps out of politics, because our politicians still carrying the rum , biscuits and corned beef attitude..

    Our sorry ass politicians haven’t learnt anything and how to do anything right. to me everything has an angle and that’s logic, If I got a loan from the bank to repair my home and take the money and buy a car, now my home is still in disrepair and I have compounded my problems. in Barbados there is no strength in the domestic financing market. because the people who suppose to be the guardians are so stuck in party politics its now very corrupt no one seems to trust each other..

    My take our people is so party political screw up we cant honestly judge for our self what to do , where to go, who to trust .As for (MOODYS) down grade , I don’t know why this becomes an issue to the (BLP) from 3 decades both parties are to be blame for the economic failure of Barbados they both play party politics with people lives in Barbados that’s why we are where we are at.

    I would want some one from (MOODYS) to tell us what the hell is wrong with them and Barbados, what is they ulterior motive of this constant dig at Barbados, let (MOODYS) take USA almost 30 trillion in debt, most South American countries is in debt, most European is struggling, the Chinese economy is slowing down and we are heading for another recession….

  7. Ryan Bayne
    Ryan Bayne April 3, 2016 at 8:54 am

    Now this is what I call “Music to my ears”. This Government keeps dodging bullets and reacting in a very rude manner instead of pro-acting and combatting the whole matter. Soon Barbados will end up like Haiti if she doesn’t be careful.

  8. Carson C Cadogan April 3, 2016 at 1:09 pm

    What is Moodys beef with Barbados?

    • Sunshine Sunny Shine April 3, 2016 at 2:58 pm

      You are a real thoroughbred foul cock. You are ridiculous beyond imagination. You are now on the SSS list as one who cares nothing about their country only a political party.

      • Big Brown April 3, 2016 at 9:47 pm

        Cadogan! SSS.

  9. Big Brown April 3, 2016 at 9:45 pm

    This is the worst Government in the history of our little country. By the time we the people get the rid of them there will be very little left to salvage.

    Is there anybody out there with any influence who can beg them for the sake of us Bajans and the future of our children to call the elections NOW?

    The country and Our Saviour will bless you.

  10. Carson C Cadogan April 4, 2016 at 11:06 am

    America ……..” total gross national debt of $18.96 trillion or about 104% of the previous 12 months of GDP.”……… maintain their AAA rating?

    “Moody’s maintains U.S. credit rating and stable outlook”.

    • Richard Johnston April 4, 2016 at 11:15 am

      The US does not have a AAA credit rating; it is AA+. The cost of funding the US national debt is about 8% of government revenues, for Barbados it is 27%. Need any further explanation?

  11. Richard Johnston April 4, 2016 at 11:16 am

    PS: the US is “too big to fail,” Barbados is not.

  12. Carson C Cadogan April 4, 2016 at 6:40 pm

    Simple answer: Party politician. He ALWAYS spoke as a BLP Politician, he never fooled me.

    Richard Johnston, the US is too big to fail for you and the Barbados Labour Party. From 2008 you all have been salivating at the thought of Barbados’ economy collapsing, but it wont. For the Govt. of Barbados, Barbados is too big too fail.


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