Barbados Braced for Tough Measures to Clear Debt Burden

Barbados must prepare for a long and painful journey back to financial and economic health, after announcing a radical plan to tackle the fourth-biggest debt burden in the world, according to the country’s new premier. The Caribbean island is still reeling from prime minister Mia Mottley’s revelation on Friday that it had discovered previously undisclosed financial liabilities, which lifted the country’s overall debt from 137 per cent of gross domestic product to more than 175 per cent, the Financial Times reported. This is the fourth-highest debt-to-GDP ratio in the world after Japan, Greece and Sudan. Given the precarious fiscal situation — the central bank’s reserves are down to just $220m, or seven weeks worth of imports — looming debt payments due this month and the upcoming hurricane season, Ms Mottley said she had no choice but to act quickly by calling in the International Monetary Fund and putting in place a debt restructuring. Read more. (Subscription required.)