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Downgrade a ‘slap in the face’ – BPSA

The local private sector said it was “dismayed” at the latest downgrade of the country’s bond rating by international ratings agency Moody’s Investors Service, and that it took little comfort from the stable outlook.

Over the weekend a statement from Moody’s said the decision to downgrade the island’s Issuer and Bond Ratings to Caa1 from B3 and revise the outlook to stable from negative was driven by low levels of foreign exchange reserves and weak funding conditions, as well as slow progress towards achieving fiscal consolidation consistent with a suitable debt trajectory.

Chairman of the Barbados Private Sector Association (BPSA) Alex McDonald told Barbados TODAY the Issuer Rating downgrade was “almost like a slap in the face” since it virtually nullified the stable outlook.

“But surely they were very dismayed. They were hopeful that the talk of growth and so on would have helped to move the ratings to a more positive sign,” McDonald said of the reaction of the BPSA membership.

The island recorded 0.5 per cent economic growth in 2015 and had about 14 weeks of foreign reserves, according to the Central Bank.

McDonald told Barbados TODAY, ideally the business community would have liked to see movements upwards.

However, he said no movement at all would have been better than a downgrade.

“We would prefer to have seen no movement rather than a movement downward. And the movement from [negative] to stable is small comfort at this time to be honest,” he said.

The BPSA Chairman warned that the country could not withstand many more of these negative reviews and called for a redoubling of efforts to deal with the national debt.

McDonald said the assessment suggested that some reform was necessary, adding that the private sector had repeatedly called for “the consultative process to really get into the belly of what this beast is” and to collectively chart a way forward.

“We have to tackle the factors that cause the negative assessment just as we have to start tackling the factors of what gives us a poor rating in the doing business schedule. We have to tackle the roots of those things and not deal with the symptoms and not have a knee-jerk reaction,” he warned.

He also told Barbados TODAY that he was looking forward to Minister of Finance Chris Sinckler’s reaction to the Moody report.

“We have read the Opposition’s comments [and] we have read Moody’s commentary on the reasons for their [Moody’s] position. We will wait anxiously to hear the Minister of Finance’s assessment,” he said.

6 Responses to Downgrade a ‘slap in the face’ – BPSA

  1. Loretta Griffith April 5, 2016 at 6:28 am

    I honestly feel it is time our Prime Minister have a candid talk with the electorate. It’s time for some brainstorming.
    To say that I am not very disappointed with the constant downgrades after all those draconian measures were implemented, would be an understatement.
    It is either our finance minister is not listening or he is being fed the wrong information.
    I would hate to think that our civil servants are not loyal to whichever government is in office regardless of their political bias.
    Barbados belong to all us and nothing should be done to make us the laughing stock of the Caribbean.
    I hope we get out of this like yesterday and there are no further downgrades.
    All the other countries seem to be making progress and Barbados seem to be only one regressing.

    • Sunshine Sunny Shine April 5, 2016 at 7:05 am

      Do you know the song, ” Dream on?” The only time that the PM is going to have a candid talk will be to execute his election plan for reelection.

    • Andrew Simpson April 5, 2016 at 8:29 am

      The electorate had better have a candid think for themselves. We might consider supporting the design and deployment of an alternative system of governance. Something a bit more transparent, responsive and efficient. Possibly employing advancements in communications and IT to represent public interest on a digital platform. Direct participatory democracy coupled with competitive free market in a truly independent society.

  2. Andrew Rudder April 5, 2016 at 9:43 am

    I would have to complement you on your foresight Ms Loretta Griffith. You have highlighted what I have made an impression and a strong declaration to the citizens of the nation! Barbadians should enhance the way; they on a wide spectrum;conduct their deportment with clients, tourists, and foreign workers. Attitude enhances the working environment and produces more productivity when it’s a positive!

  3. dave April 5, 2016 at 9:19 pm

    The PM does not have to do anything. His pension is assured !
    The electorate will vote him out because to get a third term , a Govt must really do well to get a third term. This Govt has failed miserably -and will be punished by the people.

  4. Eyes wide open April 6, 2016 at 3:30 pm

    Bajan people don’t run barbados. The same people who run the u.s n Canada controls barbados who doesn’t know that on 2016


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