Barbados has received a major vote of confidence from S&P Global Ratings, which has upgraded the island’s long-term local and foreign currency sovereign credit ratings to ‘B+’ from ‘B’, with a stable outlook.
The upgrade reflects the country’s improved fiscal discipline, economic resilience, and effective governance, following years of reform under Prime Minister Mia Mottley’s administration. S&P cited Barbados’s success in reducing public debt, stabilizing its fiscal position, and sustaining growth through prudent economic management.
The move follows the successful completion of the International Monetary Fund’s Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF) earlier this year — milestones that reinforced investor confidence and strengthened the country’s access to financing.
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Barbados is now preparing to launch the Barbados Economic Recovery and Transformation (BERT) 2025 programme, aimed at deepening financial sector reforms, enhancing fiscal governance, and boosting investment in climate resilience and sustainability.
According to S&P, Barbados has cut its fiscal deficit to 0.9 per cent of GDP in fiscal year 2025, down from 1.7 per cent the previous year, and is on track to reduce it further to 0.8 per cent in 2026. The country’s debt-to-GDP ratio is projected to decline to 95 per cent by 2026, with a long-term target of 60 per cent by 2035–36.
Economic growth is forecast to average 2 per cent annually over the next two years, supported by tourism expansion, hotel development, and infrastructure upgrades. GDP per capita is projected to rise from US$23,200 in 2023 to US$25,800 in 2025, while international reserves remain strong at US$1.9 billion.
Unemployment has fallen to 7 per cent, inflation is expected to stabilize at 2.3 per cent, and the current account deficit has narrowed to 6 per cent of GDP, compared to over 10 per cent in 2021.
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In June, Barbados successfully issued a US$500 million bond to refinance IMF obligations, restoring fiscal flexibility and signaling renewed investor trust. S&P expects Bridgetown to maintain “a productive relationship with multilateral lenders” and continue using its Barbados Optional Savings Scheme Plus (BOSS+) for local financing.
The rating agency credited the island’s “stable, predictable and mature political system” and reform-driven economic agenda for improving its resilience to global shocks. While challenges such as climate risks and tourism dependence remain, S&P noted that new disaster-risk financing mechanisms and strong international partnerships will help Barbados sustain its positive momentum.
The upgrade, analysts say, positions Barbados as one of the Caribbean’s most stable reform success stories — combining fiscal discipline, sustainable growth, and investor confidence.
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