CariCRIS reaffirms ‘high creditworthiness’ for Trinidad and Tobago

Caribbean Information and Credit Rating Services Ltd (CariCRIS) has reaffirmed the assigned credit rating of CariAA on its regional rating scale to the Government of TT.

CariCRIS in a release said these ratings indicate a high level of creditworthiness, adjudged in relation to other obligors in the Caribbean.

TT also maintained a stable outlook on the ratings.

“The stable outlook is based on projected macroeconomic stability over the next 12 to 18 months, led by an increase in real GDP growth in 2023 and continued growth in 2024; consequent expectations for relative stability in the debt to GDP ratio over the medium-term; continued financial sector soundness; robustness in TT’s sovereign wealth fund over the medium-term; and continued adequacy in international reserves and import cover,” the release said.

CariCRIS said these ratings are driven by TT's large regional economy, supported by both energy and non-energy activities; satisfactory financial sector, monetary and exchange rate conditions; retention of a comfortable debt service coverage; and a strong underlying balance of payments characteristics and adequate international reserves, notwithstanding some deterioration.

However, CariCRIS said these rating strengths are tempered by fiscal performance linked to energy supply and prices, which can be volatile – performance is also hampered by high expenditure; persistence of social vulnerabilities; heightened crime levels; and continued inadequacies in statistical compilations.

CariCRIS said the following factors could, individually or collectively, lead to an improvement in the country’s outlook:

– A decrease in total general government debt to below 65 per cent of GDP over the next 12 months.

– A sustained improvement in debt servicing capability to above seven times over the next two consecutive years.

– A fiscal surplus in excess of three per cent of GDP sustained over two consecutive years.

– A rise in import cover to 12 months or more over the next 24 months.