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S&P downgrades Barbados as financial, external woes worsen

S&PGlobal Ratings on Sept. 23 downgraded Barbados' ratings as the countrycontinues to exhibit financial and external weaknesses.

S&Plowered its long-term foreign and local currency sovereign ratings on Barbados toB- from B while keeping the outlook at negative. The rating agency alsodowngraded its transfer and convertibility assessment for Barbados to B- fromB, while the short-term ratings were affirmed at B.

Thedowngrade is attributed to the erosion of the government's financial profileover the last several years due to persistently high fiscal deficits, whichreflect both budget slippage and unbudgeted spending. S&P noted that thegovernment deficits have contributed to an increase in the country's externalvulnerabilities.

"Thefiscal slippage reflects poor implementation of various adjustment measures,which only became effective during the second half of the last fiscal year, aswell as failure to meet targets for state-owned enterprises," S&Pnoted.

"We doexpect economic growth to pick up during the next two to three years, butlackluster private-sector confidence, continued delays in several tourismprojects, and potential spillover from Brexit should keep growthmoderate," the agency added.

S&P nowexpects Barbados' per capita GDP growth to be around 1% in the next two years,noting that it is comparatively low for a country with its level of income.

S&P Global Ratings and S&P GlobalMarket Intelligence are owned by S&P Global Inc.