The Caribbean In­for­ma­tion and Cred­it Rat­ing Ser­vices Lim­it­ed (Cari­CRIS) yes­ter­day reaf­firmed the sov­er­eign is­suer cred­it rat­ings as­signed to the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go (GORTT) of Cari­AA (for­eign and lo­cal cur­ren­cy rat­ings) on its re­gion­al rat­ing scale.

The rat­ings in­di­cate that the lev­el of cred­it­wor­thi­ness of T&T, ad­judged in re­la­tion to oth­er rat­ed oblig­ors in the Caribbean, is high.

In a news re­lease yes­ter­day, Cari­CRIS said the rat­ings are dri­ven by the fol­low­ing strengths:

* T&T is a large re­gion­al econ­o­my, sup­port­ed by both en­er­gy and non-en­er­gy ac­tiv­i­ties;

* There are sat­is­fac­to­ry fi­nan­cial sec­tor, mon­e­tary and ex­change rate con­di­tions;

* T&T re­tains com­fort­able debt ser­vice cov­er­age; and

* T&T has strong un­der­ly­ing bal­ance of pay­ments char­ac­ter­is­tics and ad­e­quate in­ter­na­tion­al re­serves, notwith­stand­ing some de­te­ri­o­ra­tion.

Ac­cord­ing to the rat­ing agency, these rat­ing strengths are tem­pered by the fol­low­ing fac­tors:

1) Fis­cal per­for­mance is linked to en­er­gy sup­ply and prices, which can be volatile. Per­for­mance is al­so ham­pered by high ex­pen­di­ture;;

2) So­cial vul­ner­a­bil­i­ties per­sist, wors­ened by height­ened crime lev­els;

3) There are con­tin­ued in­ad­e­qua­cies in sta­tis­ti­cal com­pi­la­tions.

Cari­CRIS al­so main­tained a sta­ble out­look on the rat­ings.

“The sta­ble out­look is based on pro­ject­ed macro-eco­nom­ic sta­bil­i­ty over the next 12 to 18 months, led by:

(i) An in­crease in re­al GDP growth in 2023 and con­tin­ued, al­beit slow­er, growth in 2024;

(ii) Con­se­quent ex­pec­ta­tions for rel­a­tive sta­bil­i­ty in the debt to GDP ra­tio over the medi­um term;

(iii) Con­tin­ued fi­nan­cial sec­tor sound­ness;

(iv) Ro­bust­ness in T&T’s sov­er­eign wealth fund over the medi­um term; and

(v) Con­tin­ued ad­e­qua­cy in in­ter­na­tion­al re­serves and im­port cov­er.

Rat­ing sen­si­tiv­i­ty fac­tors

Cari­CRIS said among the fac­tors that could, in­di­vid­u­al­ly or col­lec­tive­ly, lead to an im­prove­ment in the rat­ings and/or out­look in­clude:

• 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 two con­sec­u­tive years;

• A fis­cal sur­plus in ex­cess of 3 per cent of GDP sus­tained over 2 con­sec­u­tive years; and

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

Fac­tors that could, in­di­vid­u­al­ly or col­lec­tive­ly, lead to a low­er­ing of the rat­ings and/or out­look in­clude:

• An in­crease in to­tal gen­er­al gov­ern­ment debt to above 100 per cent of GDP over the next 12 months;

• A sus­tained de­te­ri­o­ra­tion in debt ser­vic­ing ca­pa­bil­i­ty to be­low three times over two con­sec­u­tive years

• A fis­cal deficit in ex­cess of 10 per cent of GDP sus­tained over two con­sec­u­tive years

• A fall in im­port cov­er to six months or less over the next 12 months

• An­nu­al eco­nom­ic con­trac­tion of greater than 2 per cent over the next two years

About T&T

Trinidad and To­ba­go (T&T) are the two south­ern­most is­lands of the Caribbean chain and lie just sev­en miles off the north-east­ern coast of Venezuela. The is­lands are out­side of the usu­al path of hur­ri­canes and have large­ly been spared the an­nu­al dev­as­ta­tion that some of their north­ern neigh­bours have en­dured from storms and weath­er-re­lat­ed troughs.

The pop­u­la­tion, es­ti­mat­ed to be 1.41 mil­lion peo­ple, com­pris­es de­scen­dants of pri­mar­i­ly In­dia and Africa.

The re­port­ed adult lit­er­a­cy rate is above 98 per cent and ed­u­ca­tion is free up to the sec­ondary school lev­el, with sig­nif­i­cant sub­sidi­s­a­tion of ter­tiary ed­u­ca­tion.

The ex­pan­sion of T&T’s oil in­dus­try in the 1950s moved the coun­try from a sug­ar-based to an en­er­gy-based econ­o­my. The vast pe­tro­le­um and nat­ur­al gas re­serves have en­abled the coun­try to de­vel­op down­stream in­dus­tries such as the pro­duc­tion of liq­ue­fied nat­ur­al gas, methanol and ni­troge­nous fer­til­iz­ers.

The coun­try al­so has strong fi­nan­cial ser­vices, man­u­fac­tur­ing, and whole­sale & re­tail dis­tri­b­u­tion sec­tors. Tourism is a grow­ing sec­tor in the econ­o­my.