The Caribbean countries of Barbados, Belize and the Bahamas, among the preferred playgrounds for the world’s wealthiest bankers, may soon become known instead for Wall Street’s dark side: Debt crises.
The three nations are some of the most exposed to the sudden stop in global tourism due to the coronavirus pandemic. And after decade-long borrowing sprees, they’re also staring down big bond payments, raising concern over how the Caribbean region can repay its debt.
“This pandemic shock is unlike any shock that these sovereigns have seen in their history,” said Julia Smith, a Toronto-based analyst at S&P Global Ratings.
Tourism in the Caribbean will probably decline by 60% to 70% from April to December compared with last year, according to S&P. The ratings company downgraded the Bahamas and Belize last week, and it lowered credit outlooks in Aruba, Belize, the Dominican Republic and Jamaica to negative.