St Vincent and the Grenadines have been given a B3 issuer rating with a stable outlook by Moody’s Ratings (Moody’s).
Moody’s, which did its review in December 2024, assessed SVG’s fiscal strength at “b3” on account of the government’s high debt burden and relatively high share of foreign-currency debt.
The report stated that the government’s limited access to market funding constrains its financing options, while reliance on concessional financing and grants contains the interest burden of its high debt level.
“St Vincent and the Grenadines’ sovereign credit profile reflects the nation’s small size, limited diversification and vulnerability to external and climate shocks.”
Moody’s report stated that SVG’s ESG Credit Impact Score (CIS-4) indicates the rating is lower than it would have been if ESG risk exposures did not exist.
For SVG, this mainly reflects high exposure to environmental risk related to physical climate risks that are impacted by climate change and social risks related to an ageing population.
“Real GDP growth of around 4% in 2024 and to moderate close to 3 per cent in the medium term, supported by continued expansion in tourism and strong investment in infrastructure. We forecast inflation to decline to 2.5 per cent by the end of 2024, due to lower imported inflation.”
“The stable outlook reflects our expectation that growth will remain relatively strong in the next 2–3 years and that fiscal consolidation following the completion of large infrastructure projects will lead to a gradual decline in the debt burden. While currently unlikely, we would consider a rating upgrade in case of higher sustained economic growth and faster fiscal consolidation, leading to significant improvement in the country’s debt-to-GDP ratio.”
The December 2024 report stated that SVG’s rating could be downgraded if it faces difficulties in accessing external funding on concessional terms.
“Such an event could strain its liquidity, hurting debt service payments. Shocks derived from climate events that could lead to a substantial deterioration in St Vincent’s fiscal and debt metrics or a material increase in market borrowing would undermine the sovereign credit profile.”
A rating committee conducted the review on December 12, 2024.
