PM says S&P does not affect country’s performance
In the wake of government’s acquisition of public utilities, U.S. based financial services company Standard & Poor’s downgraded Belize’s credit rating from a B to B minus in early August. But the outlook for Belize’s financial future was stable until this week, when S&P downgraded it to a negative and confirmed that the country’s rating borders a C. The reasons given for the downgrade are growing crime, public sector wage pressures and budgetary setbacks. Today however, P.M. Barrow dissed the ratings, saying they do not affect Belize’s economic performance and that the company also wrongly forecasted the United States’ credit ratings.
“The actual rating remains the same but believe me it’s no bravado when I tell you that’s a matter of supreme indifference where I am concerned. Standard & Poor’s rates sovereign debt and that is only important for people who are in the markets, who are borrowing by way of bonds and that sort of thing. The extent that it effects Belize’s bonds that are already out there, these are the bonds that are part of the Super Bond, it doesn’t affect us as a country in any way at all. In terms of the trading in Belize bonds that are already out there it’s no doubt that it’s consequential but it doesn’t, we only borrow from the concessionary institutions now, from the multilateral institutions and so a Standard & Poor ratings has nothing to do with our ability to assume that kind of concessional development that so. And because I am indifferent I suppose there’s no need for me to go and say anything about Standard & Poor’s in terms of their effectiveness but I will, why not, they downgraded the U.S from Triple A, what happened, there was a rush into U.S. treasuries. There was a rush to assume on the part of other countries and individuals that in fact engage in this sort of thing to assume to buy more treasures. The U.S. ten year note, the yield is at its lowest despite the Standard & Poor’s downgrade. Your yield is dependent on the demand for your paper. The more demand there is the less you can pay. The ten year yield is down to two percent, in other words, Standard & Poor’s obviously got it completely wrong.”