Barbados’ chances of getting a credit rating upgrade will improve if government enters a new International Monetary Fund (IMF) programme, Moody’s Investor’s Service says.
With the country’s current IMF Extended Fund Facility expiring this month, the Mia Amor Mottley administration is yet to announce if its economic reform programme will continue with the international financial institution’s supervision and financing.
However, in its latest published credit opinion on Barbados, dated June 23, 2022, Moody’s said a new IMF programme focused on fiscal consolidation and structural reforms “would be credit positive for Barbados”.
“We expect Barbados and the IMF to announce that agreement on a new programme will be reached soon,” the international credit rating agency stated.
Barbados, which defaulted on its debt in 2018 and subsequently concluded domestic and external debt restructurings, currently has a non-investment grade Caa1 stable credit rating from Moody’s. The agency said ratings of Caa were “judged to be of poor standing and are subject to very high credit risk”.