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Written by CTV3 Publisher Wednesday, 08 February 2012 02:54

Economy

Standards and Poor is a United States based company that rates borrowers on a scale from triple AAA to D. If a country receives an investment rate of three AAA’s it means that the Government of the day has extremely strong capacity to meet its financial commitments. So what grade did Belize receive? Well, Standards and Poor cut Belize’s long term ratings from a B- to a CCC+ meaning that there are signs that the Belizean government is becoming less willing to service its external commercial debt. The present rating places Belize on the non-investment grade also known as junk bonds. With two major elections only days away, the report does not reflect well on the Dean Barrow Administration.

According to Standards and Poor the announcement comes amid low economic growth, a weak investment outlook, increased levels of crime, and limited ability to raise government revenue. This says S.P, weakens the government's payment capacity.

The report states that the country’s current account is weakening, and its external financing options are limited. Oil production which is the country’s most important foreign exchange earner is in structural decline, and tourism prospects appear lackluster given the global economic slowdown.

Finally Standards and Poor states that they could lower the rating if there were increased signs that the government intends to pursue a distressed restructuring or if additional external liquidity pressures were to emerge. An upgrade would most likely result from greater predictability about the political willingness to service debt and improved financing prospects. These would likely stem from an improved growth and investment outlook.

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