The decision by rating agency Moody’s to downgrade the credit rating of St. Vincent and the Grenadines to Caa1 with a negative outlook is the result of “prolonged neglect” during the Unity Labour Party’s (ULP) 25 years in office, Minister of State in the Office of the Prime Minister, Chiefain Neptune, said on Wednesday.
On June 30, Moody’s downgraded the Government of SVG’s long-term local- and foreign-currency issuer ratings to Caa1 from B3, affirmed the short-term local- and foreign-currency Non-Prime ratings, and changed the outlook to negative from stable.
“The downgrade to Caa1 reflects intensifying government liquidity pressures, elevated gross financing needs, and a large and rising debt burden that has become increasingly difficult to manage for a small, undiversified economy with limited financing alternatives,” Moody’s said.
“Elevated financing needs are meeting an increasingly narrow and concentrated domestic funding base, while sustained fiscal deficits have also lifted the debt stock onto a sharply rising trajectory that we project to continue through 2029, narrowing the government’s capacity to absorb additional shocks.”
Neptune noted that SVG has faced numerous shocks over the past six years, including COVID-19, the eruption of La Soufriere volcano in 2021 and Hurricane Beryl in July 2024.
He said that these events were factored into the latest Moody’s Rating, adding that while natural disasters have disrupted the country’s development, the downgrade in Moody’s Rating is fundamentally a result of prolonged neglect during the ULP’s time in office.
The ULP, which came to office in March 2001, was voted out in the November 2025 general election, winning just one of the 15 seats in the Parliament. The party went into the election with a 9-6 majority over the New Democratic Party.
Neptune said that when Vincentians went to the polls in November, “it was evident that our country had been left behind by the previous administration.
“Our nation was dealing with soaring unemployment, the lowest wages in the Caribbean, and record-high homicide rates,” he said.
Neptune, who failed in his bid to defeat then prime minister Ralph Gonsalves and win North Central Windward, said the Vincentian economy was “left in ruins due to years of reckless overspending and excessive borrowing, which primarily benefited a small elite rather than fostering genuine development for St. Vincent and the Grenadines.
“Vincentians decided enough was enough and overwhelmingly voted the NDP into government, delivering a historic victory.”
He said that since taking office, the NDP administration has taken steps to strengthen the economy and directly put money in the pockets of Vincentians.
“However, the Moody’s report underscores the deep-rooted systemic economic failures left behind by the previous administration,” Neptune said.
“When we stepped into office, we understood that the economy was fragile. What we couldn’t foresee was just how bleak the legacy of neglect from the ULP truly was until we entered the Financial Complex in Kingstown.
“The NDP remains dedicated to restoring fiscal and debt stability while working to develop our nation. There’s a lot of work ahead for Prime Minister Dr. Godwin Friday and his team to address the inherited issues.”
Neptune said Moody’s has “illuminated the economic challenges we face, emphasising that a comprehensive approach is needed.
“Decades of underinvestment mean a nationwide development programme is essential to turn things around.
“Nevertheless, the NDP was elected with a clear mandate to rebuild the economy, create jobs, and offer opportunities for Vincentians to thrive at home rather than be forced to leave in search of work.”
He said the NDP government is committed to rebuilding the economy based on the four pillars identified by PM Friday, namely, agriculture, tourism, the blue economy, and the new economy.
“We’ve already seen the confidence investors have in this plan, exemplified by the signing of an MOU with Global Port Holdings, which promises new opportunities for Vincentians across the country. This is just one example of the potential for growth,” Neptune said.
“Through disciplined fiscal management and steadfast commitment, the Government of St. Vincent and the Grenadines is determined to turn things around, reversing the neglect of the past and delivering for all Vincentians.”