New External Financing Raises Debt Fears

BMI View: New government financing taken on to plug Barbados's gaping 8.4% of GDP fiscal deficit in 2009 has increased our concern about the government's ability to meet its debt obligations going forward. While a credit event for the island is not our core scenario, we highlight that the government will have to follow through on its recent pledges to curtail spending if it is to avoid major repayment difficulties further down the line.

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