Finance Minister Colm Imbert says although the country’s debt level has indeed increased, the Government took the appropriate decisions, in the short and long-term interest of the population.
This as credit rating agency, Caricris has downgraded the sovereign issuer ratings of the Government by one notch to CariAA (foreign and local currency ratings) on its regional rating scale.
Caricris said the one-notch lowering of the Government’s ratings was driven by a general deterioration in key credit metrics of the sovereign over the past 5 years from when its rating of T&T was last adjusted.
Caricris also assigned a stable outlook on the ratings.
“We have taken note of the decision by Caricris to keep T&T well into investment grade territory, although reducing our rating by one notch because of our active use of fiscal policy to soften the COVID-related blow to the economy,” Imbert said in a release.
He said the rating agency has put a stable outlook to the rating of T&T adding that this shows that Caricris believes in T&T’s determination to bring its public finances under control.
Caricris also identified a number of T&T’s key strengths including satisfactory financial sector, monetary and exchange rate conditions; comfortable debt service coverage when compared to its regional peers; the slower rate of GDP decline expected in 2021 and a return to growth in 2022; robustness in T&T’s sovereign wealth fund despite drawdowns for budgetary support; anticipated improvement in fiscal balances as COVID-19 impacts draw to a close given; vaccinations domestically and globally, along with some positive tax and expenditure measures; and continued financial sector soundness and strength in international reserves and import cover.