S&P report says Caribbean debt is on the rise

By added on 24/05/2012

The global financial crisis levied a heavy toll on Caribbean sovereigns, said Standard & Poor's Ratings Services in a published report titled "Caribbean Debt is on the Rise", reports Reuters.

Economic growth and foreign direct investment in the Caribbean have slowed while the fiscal and debt profile of many sovereigns weakened. Caribbean sovereigns increased net public-sector debt to 57 per cent of the weighted-average regional GDP in 2011 from 37 per cent in 2008. Some factors, such as the weak global economy, are temporary, but the Caribbean Basin also continues to struggle with structural challenges.

"Compounding the economic decline and sluggish recovery are structural weaknesses, including lower national savings rates than those of other emerging market countries, persistent current account deficits, and a high reliance on external financing," said Standard & Poor's credit analyst Kelli Bissett.

These factors increase the Caribbean nations' vulnerability to external financial and economic shocks.

Standard & Poor's rates 10 sovereigns in the Caribbean Basin, including Aruba, The Bahamas, Barbados, Belize, Curacao, Grenada, Jamaica, Montserrat, Suriname, and Trinidad and Tobago.