Barbados and the global recession

23.07.2012 The Central Bank of Barbados is trying to refuse the argument made by the rating agency «Standart & Poors» in order to lower the credit rating of Barbados "BBB-/A-3" to "BB + / B".
Explaining its decision to downgrade the country, specialists of the agency «Standard & Poors» noted that there is further accumulation of debts in the private sector, and companies incorporated in Barbados, face the challenge of reducing its competitiveness against the backdrop of the global recession.
In response to these statements, the Central Bank of Barbados, gave evidence that the financial position of the state improved from year to year: the government has developed a financial strategy for reducing the budget deficit and the ratio of public debt to GDP. The government reduced the deficit from 9.1% in 2010 to 4.6% in 2011.
In addition, as the Central Bank noted that the rate of increase of public debt "significantly decreased" and remains low in comparison with other countries. Up to date, the debts of the private sector make 77% of GDP. Management of the Central Bank noted that the position of Barbados favorably differ from the large economies as the United States (100% of GDP), Portugal (106%), Canada (84%) and Germany (83%). According to reports by the end of 2012 the public debt will reduce to a level of 65%.

Expert’s opinion

The small island country in the Caribbean does not want to fall behind the leading economies in the world and, apparently, is entitled to it: the numbers are impressive. Note, that the Central Bank of Barbados thoroughly prepared to refute the arguments of «Standard & Poors»: rating was ready on February, and a refutation only on July! However, what are the numbers! We want to believe the Government of Barbados and to invest in the economy. But it is worth to understand that, comparing itself with the leading economies of the world, the authorities did not take into account that "Little kids - little worries, big kids - a big problems."

On the basis: http://www.centralbank.org.bb/, and http://www.tax-news.com/

Julia Nepomnyaschikh ( the paralegal of Moscow office of Honest & Bright)