Opposition leader Ralph Gonsalves has launched a stinging attack on the current St Vincent administration, accusing them of spooking the market and directly causing a downgrade in the country’s credit rating through fiscal incompetence and reckless rhetoric.
Speaking on Star FM, Gonsalves said that the new government’s public declarations that the national debt is unsustainable and that St. Vincent and the Grenadines is a near failed state have alarmed international investors and agencies.
Gonsalves pointed to a periodic review issued by Moody’s in December 2025 as evidence that the downgrade was avoidable.
According to the former Prime Minister, that report explicitly warned that a downgrade could occur if the government faced difficulties in accessing external funding on concessional terms or if there was a material increase in market borrowing.
He asserted that under his leadership, the country maintained its rating for ten years by relying on cheap, concessional money from sources like the World Bank and the Caribbean Development Bank.
The core of the fiscal mismanagement, Gonsalves argued, lies in the government’s shift toward high-interest loans on the domestic market. He noted that the new administration sought to borrow 200 million dollars through local loans, which Moody’s identified as a significant risk.
He revealed that recent borrowings have come with interest rates as high as 7.25 percent for short terms, a sharp contrast to the 0.75 percent to 3.5 percent rates secured during his tenure.
He further claimed that the Minister of Finance seemed uncurious about the specifics of these loans, unable to provide clear details on the terms during parliamentary questions.
Gonsalves also criticized the government’s use of borrowed funds, alleging they are cannibalising the budget by using money intended for capital projects to cover recurrent expenditures like civil servant bonuses and village projects he termed itsybitsy bubble gum.
He characterized the government’s talk of debt swaps as irresponsible, suggesting it implied that lenders would have to take a haircut, which further unsettled Moody’s.
Gonsalves accused the government of trying to erase history by removing the July 2025 Moody’s report from the Ministry of Finance website.
He claimed this was done because the previous reports undermine the narrative the current administration is trying to build about the state of the economy.
Gonsalves warned that unless the government changes its approach and stops providing mixed signals to the market, the fiscal situation will continue to deteriorate.
