T&T doesn't believe trade will be affected
Barbados' downgrade of sovereign ratings...
TRINIDAD and Tobago manufacturers are not worried that trade will be affected between Barbados and this country following a downgrade of Barbados' foreign and local-currency sovereign ratings.
On Tuesday US-based ratings services Standard & Poor's lowered its long-term foreign- and local-currency sovereign credit ratings on Barbados to "BB+" from "BBB-".
At the same time, Standard & Poor's lowered the short-term ratings to "B" from "A-3". The outlook was stable.
Standard & Poor's has also assigned to Barbados' foreign-currency debt a recovery rating of "3", and revised the transfer and convertibility assessment to "BBB-" from "BBB".
"The downgrade reflects our opinion that Barbados' economic fundamentals continue to weaken. We believe this weakening stems, in part, from rising competitive challenges and other structural factors that the government can address only in the long term.
"In the short to medium terms, the difficult external environment will hamper the economic and investment outlooks," S&P said in its rationale.
But Trinidad and Tobago Manufacturers' Association (TTMA) president Dominic Hadeed said yesterday he had not spoken to people to find out how it might affect trade relations, "other than most of the products Trinidad sells to Barbados are consumer products so I don't see how a downgrade would affect the type of products they buy from us".
"Unless it's a dissuading fact for people doing investments like construction," he told the Express by phone. "But I don't see it—we definitely sympathise with Barbados; they've been trying their best and with tourism being what it is they've been having it harder than most countries. But I can't tell how it will affect anything."
Hadeed said he didn't think local manufacturers with operations in Barbados would be concerned.
But he said a downgrade to Barbados might raise the cost of borrowing for people on the island. "Barbados is a good trading partner to us. It's still too early to tell (the impact) but I believe that the economy appears to have bottomed out—not seeing it getting worse—it is holding steady. I think the next move is up. They are starting to do what they need to do (to fix the economy)," he added.
Governor of the Central Bank of Barbados, Dr Delisle Worrell, said yesterday he was puzzled at the decision of S&P to lower the island's long-term foreign and local currency sovereign credit ratings to "BB+" from "BBB-".
"There's nothing in the (S&P) statement which justifies the downgrade. It's a puzzle to us," he told a news conference in Barbados, insisting S&P had misclassified the country.
"We happen to know that these ratings are decided by an investment committee which is drawn from within Standard and Poor's office from around the world, and we happen to know there was considerable debate about this downgrade within the committee," Worrell said in a CMC report.
He added: "There are many members of the committee who I believe understand that what they have done makes no sense, but obviously, they were not able to persuade the people who do not understand."