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  • Speaker Of The House Signs MOU With FOPREL And SICA

    Friday, 07 September 2018 02:44
  • New International Flight Headed To Belize

    Friday, 07 September 2018 02:46
  • 224 Farmers Graduate From Farmers Field School

    Friday, 07 September 2018 03:09

noimageThere is bad economic news to report tonight. Standard and Poors credit rating agency has lowered their long-term foreign and local currency sovereign credit ratings for Belize’s from B minus to CCC plus.

The agency also indicated that they were lowering their short-term foreign and local currency sovereign ratings from B to C.

The lowered ratings takes Belize’s credit ratings, from the perspective of Standard and Poors, to junk status and it can have wide impacts on how financial creditors and investors view Belize’s financial capacity.

For clarity and comparison, prior to their economic collapse a few years ago Greece’s credit ratings was also at CCC plus.

According to the report from Standard and Poors, their lowered rating is the result of the country’s fiscal and external imbalances, limited access to external funding, reduced foreign exchange reserves and the loss of correspondent banking relationships.

The report notes further that there is also an unwillingness or inability to services its debt given worsening Government liquidity.

The report further adds that they expect Government debt to rise to 81% of GDP this year, mostly due to the liability payments for the expropriations of Belize Telemedia Limited and Belize Electricity Limited. It warns that while increased payments have limited local currency available, the coupon rate for the Superbond will increase in August 2017 to 6.767% followed by another increase in 2019.

Finally, Standard and Poors indicated that in view that the Government would seek a commercial debt rescheduling, it will likely further lower their ratings within the next twelve months.

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