RATING ACTION:
On September 15, 2022, CariCRIS reaffirmed the Issuer/Sovereign Credit ratings of CariBBB- (Foreign and Local Currency Ratings) on its regional rating scale assigned to the The Government of Saint Lucia (GOSL). A stable outlook was maintained.
RATING SENSITIVITY FACTORS
Factors that could lead to an improvement in the Ratings and/ or Outlook include:
- Substantial changes in the debt levels leading to a debt to GDP ratio below 65%
- Achievement of a balanced budget over the medium term
- Sustained GDP growth of the order of 3% per annum or more (above pre-COVID-19 level)
Factors that could lead to a lowering of the Ratings and/ or Outlook include:
- Significant changes in the fiscal position leading to a fiscal deficit larger than 15% of GDP
- Substantial changes in the debt levels leading to sustained debt to GDP in excess of 90% alongside a decline in debt servicing to below 2 times
RATING RATIONALE
Caribbean Information and Credit Rating Services Limited (CariCRIS) has reaffirmed the ratings of CariBBB- (Foreign Currency and Local Currency Ratings) on its regional rating scale for the several rated debt issues of the Government of Saint Lucia (GOSL). These ratings indicate that the level of creditworthiness of these debt obligations, adjudged in relation to other debt obligations in the Caribbean, is adequate.
CariCRIS has also maintained a stable outlook. The stable outlook is based on the stabilization in fiscal performance and in debt to GDP following the initial COVID-19 shock in 2020. Supporting the debt to GDP containment within the current rating category’s limits is the expected GDP growth of around 12% in 2022, a continued inflexion away from 2019’s and 2020’s contractions. Returning tourism activities are expected to support balance of payments health. However, downside risks to the outlook are significant and include inflation and economic slowdown in source markets, slowing the path to full recovery. Further virus impacts and potential hurricane strikes remain key risks as well.
Analyst’s Contact Info:
Stefan Fortuné
Phone: 1-868-799-6751 (m)
Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this product.