International rating agency, Moody’s Investors Service, on Thursday March 19th, 2016 changed the outlook on the Government of St Vincent and the Grenadines’ B3/NP issuer and B3 government bond ratings to stable from negative and affirmed the ratings.
The rating agency expressed that the rating action reflects its expectation, that faster growth and lower fiscal deficits will keep St Vincent’s debt metrics consistent with B-rated peers.
Moody’s forecast that the Real GDP of SVG for this year and next year will likely to increase closer to 2%, after averaging only 0.5% per year from 2010 to 2015, and debt to end at 260% of revenues in 2016, similar to the 234% median for ratings peers.
The stable outlook reflects Moody’s view that while debt will likely continue to rise in the next two years, the increase will be moderate and debt affordability will continue to be supported by low interest funding from multilateral and bilateral creditors.
However, the local currency ceiling remains unchanged at Ba3. The foreign currency bond and bank deposit ceilings also remain unchanged at Ba3/NP.