Barbados

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Economic recovery will pick up in 2022 as Barbados manages the near-term impacts of recent natural disasters and the COVID-19 pandemic. Financing from multilateral institutions and a smooth debt service profile post debt exchanges in 2018 and 2019 will help keep Barbados? near-term payment risk low. -- Economic growth in 2021 will be slower than expected as the island copes with the aftereffects of ashfall from a nearby volcanic eruption and Hurricane Elsa, while continuing to manage its COVID-19 exposure. -- Increased global energy prices and dampened tourism receipts will weaken Barbados? fiscal and external position. -- However, we believe the government?s strong

...The prolonged nature of COVID-19 has led us to revise down our real GDP projection for 2021 to 1.7%. Barbados started 2021 with a renewed surge in COVID-19 cases, which led the government imposing a nationwide lockdown in early February. This, along with global travel quarantine protocols, limited the recovery in tourism. Although arrival numbers started to gradually improve in the summer, the island's exposure to weather and physical risks was highlighted as Barbados managed the dual impacts of ashfall from a nearby volcanic eruption in St. Vincent in April and the infrastructure damage resulting from Hurricane Elsa in July. These events, combined with the rapid spread of the delta variant in the third quarter that led to further lockdown measures, have further dampened recovery prospects for 2021....

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