January 9, 2025
Moody’s has affirmed Trinidad and Tobago’s rating at Ba2 with a Stable outlook, according to a report from the Ministry of Finance. This affirmation is based on the country’s return to sustained growth, primarily driven by the non-energy sector. Despite lower-than-expected energy revenues in fiscal year 2024, which increased the fiscal deficit to 4.8 percent of GDP from 1.7 percent in fiscal year 2023, Moody’s acknowledges the government’s efforts to diversify fiscal revenue. This is evidenced by the operationalization of the Trinidad and Tobago Revenue Authority (TTRA) in 2025.
The rating agency also notes that potential fiscal risks are mitigated by significant buffers, including the Heritage and Stabilisation Fund (HSF) and cash reserves amounting to more than 40 percent of GDP in fiscal year 2024.
Colm Imbert, the Minister of Finance, stated, “The rating agency recognizes the diversification efforts undertaken by our country, reflected in the growth of our non-energy sector, our constitutional system of checks and balances, and our improved data transparency track record.” He emphasized that this also reflects the government’s commitment to implementing structural fiscal and economic reforms.
Moody’s indicated that the outlook on the current Ba2 rating remains Stable, due to the decline in Trinidad and Tobago’s foreign-exchange reserves in early 2024, resulting from reduced energy receipts due to declining gas prices. However, Shell T&T’s investment decision reduces uncertainty regarding the country’s future hydrocarbon production prospects and aligns with the baseline view of renewed expansion in natural gas production starting in 2027.
The Minister of Finance highlighted that the country is increasingly attracting oil and gas investment, which Moody’s recognizes. New gas projects, such as the Osprey and Cascadura fields, will add production this year and support growth prospects. He also indicated that the outlook for the medium term is very promising.
Trinidad and Tobago’s strengths are further recognized by international markets. In June 2024, the nation issued a 10-year US $750 million bond at an attractive rate of 2.18 percent over US Treasury Notes. Currently, yields on Trinidad and Tobago’s debt are lower than those of countries rated two or three notches higher by Moody’s, such as Panama (Baa3) and Colombia (Baa2). Trinidad and Tobago holds investment-grade ratings of BBB- from S&P and AA from CariCRIS, reflecting the country’s strong economic fundamentals and prudent fiscal management.
Source: (Caribbean News Global)
Disclaimer:
Analyst Certification – The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure – The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.