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Monday, December 22 2014 @ 06:40 PM AST

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S&P downgrade unjustified, Central Bank of Barbados says

The downgrade of Barbados' credit by Standard and Poor's is without justification, the Central Bank of Barbados (CBB) said in a release dated December 20. "The current performance of the Barbados economy is better than a year ago in every dimension. The foreign exchange reserves have stabilized and there is no longer a threat to the value of the Barbados dollar. Tourist arrivals have held up in 2014, and tourist expenditures are estimated to have increased modestly. Airlift has increased for the coming winter tourist season and the tourism outlook has improved. We are witnessing the beginnings of a turnaround in hotel and villa construction, upgrades and refurbishment of tourism facilities, and other construction. The growth of tourism and construction and spinoffs to retail and business services should yield growth of about 1.5 per cent in 2015," said the CBB.

Government has demonstrated commitment and fortitude in addressing the fiscal deficit, the CBB said. The adjustment was front loaded, with the shedding of 10 per cent of the public sector work force and the introduction of university fees, along with tax and expenditure measures. Progress has been monitored and adjustments have been made throughout the year.

In a December 16 statement, Finance Minister Chris Sinckler made public the budgetary limits set for state-owned enterprises, to achieve a fiscal target of no more than 7.2 per cent, a saving of 5.3 per cent, on the deficit for the last fiscal year.

Sinckler also provided further evidence of Government's firm commitment to fiscal consolidation: measures to limit tax exemptions are to be introduced in April, special temporary taxes that expire in March are to be renewed for one more fiscal year, and legislative limits on fiscal spending will be brought into force. Fiscal consolidation, improved public sector productivity and the achievement of a low and sustainable fiscal deficit remain the objectives of government's medium term fiscal adjustment programme, the CBB said.

"The servicing of government's external debt presents no challenges, with a ratio of no more than 10 per cent of expected foreign receipts on the current account devoted to interest and repayment. Interest payments absorb almost 30 per cent of government revenues, a proportion which is being reduced with the reduction in short term interest rates," the CBB said.

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Total Chaos hosts Christmas in Palmiste Park 2014



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Jamaica currency depreciation rate halved, RBC says

From over 15% in November 2013 to 7.35% in November 2014.