Durrant Pate/Contributor

Regional credit ratings outfit, Caribbean Information and Credit Rating Services (CariCRIS) has upgraded its Regional Scale Local Currency (LC) and Foreign Currency (FC) Ratings for the Government of Barbados (GOB) by one-notch to CariBBB+. 

The ratings indicate that the level of creditworthiness of this obligor, adjudged in relation to other obligors in the Caribbean, is adequate. The one-notch upgrade reflects strengthening across key macroeconomic and policy pillars, including income and economic structure, fiscal policy, monetary/exchange rate management, external sector strength, and political stability.

CariCRIS cites the key drivers of the rating improvement as, “the continued decline in the debt-to-GDP ratio, which fell to 94.6% in December 2025 from 97.2% a year earlier, supported by sustained fiscal consolidation efforts. Economic growth remains strong and broad-based, driven mainly by tourism, business services, and construction activity, while tourism performance continues to exceed pre-pandemic levels with record long-stay arrivals supporting foreign exchange earnings.

This is in addition, the successful completion of the International Monetary Fund (IMF) Extended Fund Facility programme, which has further strengthened policy credibility and enabled access to additional IMF support through the Resilience and Sustainability Trust. Fiscal performance has also improved with the primary balance increasing to 4.0% of Gross Domestic Product (GDP) in Fiscal Year 2024/25.

Stable outlook maintained

At this level, the primary balance has exceeded expectations while external buffers remain strong, with gross international reserves providing more than six months of import cover and supporting external debt servicing capacity. CariCRIS maintains a stable outlook, expecting continued fiscal discipline (primary surpluses above 3%) and moderate growth to support debt reduction over the medium term. 

Positive rating triggers include a reduction in debt below 85% of GDP (currently at 93.3%), which would signal further strengthening of the sovereign balance sheet, as well as sustained fiscal surpluses above 3% of GDP over the next 12 months, which would reinforce the medium-term debt reduction trajectory. 

Negative rating risks include import cover falling below 12 weeks without credible sources of external reserve replenishment, delays in tourism-related investment projects scheduled for 2026 that could weaken growth prospects. 

It also includes slippage in the implementation of the Barbados Economic Reform and Transformation (BERT) 2026 programme that could undermine fiscal consolidation, and a sustained deterioration in the fiscal balance that weakens the primary surplus and slows progress toward debt reduction targets.