Don't panic, Finance Minister tells Barbadians

BRIDGETOWN, Barbados, Monday June 20, 2011 – Finance Minister Chris Sinckler, is urging Barbadians "not to push the panic button" because of a downgrade of the island's domestic currency rating by international rating agency Moody's.

Last Tuesday, Moody's downgraded Barbados' domestic credit rating from Baa2 to Baa3, and revised the country's outlook to negative, while affirming its rating on Barbados' foreign currency bonds. Twenty-four hours after that report was issued, another ratings agency, Standard and Poor's, reported that the island's economy was accelerating and maintained the island's BBB- investment grade rating and its economic outlook as "stable".

Saying that he was still puzzled about Moody's latest rating, Sinckler insisted that the island's economy was in a better position today than in 2010.

"One would have to ask oneself the question, what was it [rating] really all about? The concern on the domestic side is a little overblown," he said.

Sinckler added that a perusal of the National Insurance's investment report, which was compiled by its investment committee, revealed that a recommendation was made to its board to come up with alternative investment instruments, because of an over subscription of treasury bills that left the entity with insufficient amounts to add to its investment portfolio.

“I have banks in Barbados who are sending private sector companies to the Government for guarantees of private projects and this shows the level of confidence which the banking sector has in government," the Finance Minister said.

“Therefore, to try to create this impression that there is some potential crisis in the domestic market to meet the commitments of government in terms of its ability to finance its operations by the use of private capital…we do not support that analysis, and clearly it is not supported by Standard and Poor's, the Central Bank of Barbados and the Government of Barbados, but that is Moody's view.”

Sinckler reiterated that government would remain focused on its recovery plan. He said that although the recovery may not come as quickly as some people want, the Freundel Stuart-led administration would stay the course.

“It is when you get in to changing this and changing that...abandoning this and abandoning that, that you then run into problems, because there is great uncertainty in your economic planning, there is a lack of confidence in your approach and that, above all others, will undermine the level of confidence which investors have in the management of the country and the economy," the Finance Minister contended.