Trinidad and Tobago's credit rating outlook now positive

Moody’s Investors Services has moved TT’s credit rating outlook from stable to positive but affirmed the Ba2 rating – the second-highest rating in the sub-investment grade spectrum, falling just below investment grade.

Finance Minister Colm Imbert considered this a welcome development, a release from the ministry said on Monday, as it acknowledges the positive outcomes of TT’s efforts despite oil and gas-price shocks and the effects of the covid19 pandemic.

It said Moody’s positive outlook is based on the fiscal performance of TT, which goes beyond the windfall last year as a result of the surge in oil and gas prices and flows from positive developments favourably affecting gas-production capacity and economic diversification.

It added that this improvement is also an acknowledgement of policy effectiveness as shown by the implementation of “difficult, but necessary long-term reforms in restructuring transfers and subsidies and improving revenue collection” by the government.

“The government’s adopted structural fiscal and economic reforms are reflected in improving institutions and governance strength assessment as a driver of this action,” Moody's rating said.

The release said this is a first step in the convergence and harmonisation of the international credit ratings, which are also significantly important in elevated interest rates.

This will also positively influence the cost of funding for the government, state enterprises and the economy, it said.