The ratings on Barbados reflect the country's social cohesion and political stability, as well as the fiscal flexibility provided by the National Insurance Scheme surpluses to offset the vulnerabilities posed by the narrow economic base and sizable external imbalances. Consensus policymaking provides a social safety net and a predictable business environment that Standard&Poor's Ratings Services expects to bring per capita GDP to more than $13,500 this year (versus the $8,700 for the 'BBB' median). We expect the central government deficit to narrow to 2.7% of GDP in 2008 from 3.1% in 2007 as corrective revenue-generating measures--including higher fees and excise taxes combined with an end to fuel subsidies that began in April--reverse the fiscal deterioration in 2007 and
