Global rating agency, Moody’s has confirmed T&T’s Ba1 credit rating in the midst of the COVID-19 pandemic, but the outlook for the country is not positive, a release from the Ministry of Finance has stated.
The statement noted that T&T’s rating is “one of the highest in the Caribbean region.”
It continued to underscore that in a series of rating decisions that have seen a number of oil and gas exporting countries downgraded all over the world, the rating agency “has simply changed the outlook to negative.”
In 2019, Moody’s rated the country at Ba1, stable.
The Finance Minister, Colm Imbert noted: “The rating agency’s decision to keep the rating of T&T unchanged is a testimony to the resilience of the country, in the face of unprecedented shocks.”
According to the statement, the COVID-19 crisis combined with the collapse of oil prices have led rating agencies to change the rating of a very large number of countries.
It highlighted that the shock-absorption capacity of T&T has been enhanced by a bold and pro-active policy response.
It also noted that the rating stability “owes in good part to the track record of the government,” which responded to the previous oil shock post-2015, in a way that, according to Moody’s, exceeded its expectations.
The Ministry announced that it is the intention of the government to continue to preserve what underpins Moody’s credit rating—the sizable fiscal buffers, low liquidity risk and limited external vulnerabilities.
Imbert remarked that the aforementioned mechanisms protect the population of T&T throughout exceptionally adverse global circumstance.
Last year, Moody’s said that T&T’s rating would be downgraded if government debt ratios were to materially worsen.
The agency said that while economic growth was projected (pre-COVID-19), there were still challenges resident in T&T.
Moody’s said, in the prior year, that prospects for economic diversification remained weak, institutional shortcomings were present in the country and ineffective policy-making institutions were constraining the country’s credit rating.
In 2019, It said that the business environment remained sickly due to structural factors like high crime rates, skills mismatches in the labor force, limited access to finance, and climate-related risks, which posed challenges to the development of more robust non-energy economic sectors.