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Belize’s foreign currency credit ratings has further deteriorated

Belize’s foreign currency credit ratings have further deteriorated with a forecast for the country’s gross domestic product to exceed one hundred and thirty percent. Moody’s Rating Service issued a notice on the country’s rating earlier today stating that there is a high probability that Belize will be missing its interest payments on its foreign debt due to the current weak economy coupled with the devastation of the tourism industry amid the Covid-19 pandemic.  Moody’s outlook on Belize’s credit, however, was upgraded taking it from a negative category to stable.  The rating agency anticipates that the new government administration will have to seek liquidity relief which will further strain the country’s sovereign liquidity and funding position.  The report notes that the payment deferral from bondholders that Belize received in August was merely a short-term relief and that come 2021 when the interest payments become due Belize will be unable to honor them.  According to Moody’s it is expected that Belize’s economy will contract by 14% in 2020 and then rebound with gross domestic product growth of 8.1% in 2021.