Moody’s update on Belize quite moody; country may renege on debts

Three weeks ago, the Moody’s Investors Service reported that the government’s bond rating of C-A-A was likely to remain the same for the next four or five years because of the two debt defaults in the past seven years coupled with the country’s low debt tolerance and weak ability to service external debt. Moody’s put the debt in the range of seventy percent of G.D.P. which in turn makes the government credit wordiness’ vulnerable.  An updated report issued on Monday by Moody’s says that Belize is among a growing number of Caribbean countries likely to renege on its debts as the region finds it difficult to tackle options to deal with their ailing economies. The report cites that debt restructuring has been undertaken twice in Antigua and Barbuda, Belize, St Kitts and Nevis, Grenada and Jamaica and that the risk of sovereign default is particularly high in Belize and Jamaica. Moody’s reports that the region’s debt problem has ballooned since the 1990s due to, “poor budget discipline and uncompetitive economies that have proven too dependent on tourism.” And a senior analyst, Edward Al-Hussainy states that the Caribbean’s debt crisis is the result of a combination of poor fiscal discipline and unproductive investment that failed to significantly raise potential growth rates.