Govt engages Fitch for third credit rating

CABINET has approved the engagement of credit ratings agency Fitch to do a third rating on TT’s economy. This was disclosed in a statement issued on Wednesday by the Finance Ministry after a meeting between Finance Minister Colm Imbert and representatives of Fitch at the Eric Williams Financial Complex in Port of Spain on Monday. The statement said Fitch will review this country’s sovereign debt ratings, provide an initial/indicative rating and monitored rating of TT for the period May 1, 2018 to April 30, 2022.

Fitch’s review will involve meeting with various public and private sector institutions to obtain certain economic data. These include oil and gas tax reform, identification of potential vulnerabilities and fiscal and monetary policy. At the end of its mission, Fitch will present its preliminary views on the outlook for the economy, and the major macroeconomic variables which inform its credit opinion.

The ministry said Government has engaged rating agencies Moodys and Standard and Poors (S&P) over the last several years to conduct credit ratings on its sovereign debt given recent variances in the credit ratings provided by Moodys and S&P, the ministry said Cabinet approved the engagement of Fitch to do a rating. Former government minister Mariano Browne questioned what would be the benefit of Fitch’s rating. He opined that Fitch’s rating could fall somewhere between ratings from Moodys and S&P.

Browne said the real measure would be how TT’s economy performs.

He added this performance would be determined by practical determined steps which are clearly mapped out and executed within specific time frames. Imbert announced that Government was considering engaging Fitch to do a rating, after outdated figures for natural gas production were given in error to S&P in May. This led to a downgrade of the country’s short-term outlook from stable to negative. Negative means a rating may be lowered, stable means it is unlikely to change, and positive means it may be raised.

Imbert said correct data reflected the economy in 2017 shrinking by only one per cent, not a wrongly listed figure of 2.6 per cent. Further, the right data suggested the economy will grow by 1.5 to 1.8 per cent this year, he added. Energy Minister Franklin Khan agreed, accepted blame and vowed his scrutiny before his ministry ever again sends such data to S&P.