Stan­dard and Poors, the in­ter­na­tion­al cred­it rat­ing agency, has af­firmed this coun­try's cred­it rat­ing at BBB-. That is an in­vest­ment grade rat­ing re­flec­tive of the coun­try's cred­it strength.  

S&P has al­so main­tained its sta­ble out­look for T&T. 

Pro­vid­ing the ra­tio­nale for its rat­ing and out­look for T&T, the rat­ing agency said, its ex­pects the coun­try's eco­nom­ic growth will re­main weak for the next two to three years due to de­clin­ing pro­duc­tion in the coun­try's im­por­tant hy­dro­car­bon sec­tor.

"Low growth will con­tribute to fis­cal deficits and ris­ing debt in the near term. T&T's eco­nom­ic, fis­cal, and debt met­rics are weak­er than last year, high­light­ing the im­por­tance of boost­ing eco­nom­ic per­for­mance through, among oth­er things, in­creased hy­dro­car­bon pro­duc­tion and greater eco­nom­ic di­ver­si­fi­ca­tion to sta­bilise its fi­nan­cial pro­file in fu­ture years."

S&P said re­cent de­vel­op­ments lead it to be­lieve that nat­ur­al gas pro­duc­tion will in­crease af­ter 2026, sup­port­ing GDP growth and gov­ern­ment rev­enues.

"The rat­ings al­so re­flect a favourable ex­ter­nal pro­file, in­clud­ing a strong ex­ter­nal cred­i­tor po­si­tion, which in­cludes as­sets of the gov­ern­ment's Her­itage and Sta­bil­i­sa­tion Fund," said the rat­ing agency.

In a news re­lease, the Min­istry of Fi­nance said that the S&P point­ed out that "the gov­ern­ment's large liq­uid fi­nan­cial as­sets mit­i­gate the ef­fect of eco­nom­ic cy­cles on the coun­try's pub­lic fi­nances and it es­ti­mates these as­sets will rep­re­sent about 47 per cent of (Gross Do­mes­tic Prod­uct) GDP dur­ing the out­look hori­zon." 

The min­istry out­lined that the S&P an­tic­i­pates some de­cline in hy­dro­car­bon pro­duc­tion in the near term, lead­ing to a tem­po­rary de­crease in rev­enue, be­fore sig­nif­i­cant im­prove­ment oc­curs in both the avail­abil­i­ty of nat­ur­al gas and rev­enue, as ma­jor new gas fields come on stream, in line with Gov­ern­ment pro­jec­tions. 

“It is clear that the pre­sen­ta­tions made by the Min­is­ter of Fi­nance and his team of tech­nocrats, to S&P, dur­ing its an­nu­al cred­it rat­ing vis­it ear­li­er this year had suf­fi­cient cred­i­bil­i­ty for S&P to main­tain its in­vest­ment grade rat­ing for T&T,” the min­istry re­lease fur­ther stat­ed. 

Fi­nance Min­is­ter Colm Im­bert praised S&P for its bal­anced and mea­sured view of the coun­try and its val­i­da­tion of the Gov­ern­ment's pru­dent han­dling of the econ­o­my and sound man­age­ment of its fis­cal ac­counts. 

The min­istry went on to state that over the last nine years, T&T has demon­strat­ed ju­di­cious fis­cal dis­ci­pline and in so do­ing the coun­try has built up sta­ble pub­lic in­sti­tu­tions and sub­stan­tial fi­nan­cial as­sets, mak­ing the coun­try a safe har­bour for in­vestors dur­ing try­ing times. 

It not­ed that the Gov­ern­ment launched two large, heav­i­ly over­sub­scribed, in­ter­na­tion­al bonds over the last year, US$550 mil­lion in Sep­tem­ber 2023 and US$750 mil­lion in June 2024, with great suc­cess, achiev­ing sov­er­eign spreads over US Trea­suries that were among the low­est in the Latin Amer­i­ca and Caribbean re­gion (170 bps and 204 bps re­spec­tive­ly). 

“The Gov­ern­ment re­it­er­ates its re­solve to con­tin­ue tak­ing re­spon­si­ble fi­nan­cial ac­tions and the cor­rect de­ci­sions to build a stronger T&T for a bet­ter fu­ture, as we nav­i­gate through tur­bu­lent fi­nan­cial con­di­tions,” Im­bert added. 

In pro­vid­ing its out­look for the T&T econ­o­my, S&P said: "The sta­ble out­look re­flects S&P Glob­al Rat­ings' view that T&T's econ­o­my will con­tin­ue to ex­pe­ri­ence low growth, mod­er­ate fis­cal deficits, and a slow­ly in­creas­ing debt bur­den over the next two years, while en­er­gy ex­ports will sup­port the coun­try's ex­ter­nal bal­ances. We ex­pect broad con­ti­nu­ity in key eco­nom­ic poli­cies af­ter na­tion­al elec­tions due next year."

The in­ter­na­tion­al rat­ing agency warned that it could low­er T&T's rat­ings over the next two years if GDP per capi­ta fails to rise in line with our fore­cast.

"Sim­i­lar­ly, fail­ure to take time­ly cor­rec­tive steps to en­sure long-term bal­anced eco­nom­ic growth and the sus­tain­abil­i­ty of pub­lic fi­nances could erode the coun­try's ca­pac­i­ty to re­spond to eco­nom­ic or oth­er chal­lenges, re­sult­ing in a low­er rat­ing that re­flects in­sti­tu­tion­al short­com­ings. We could al­so low­er the rat­ing if T&T's ex­ter­nal po­si­tion ma­te­ri­al­ly wors­ens be­yond our base-case sce­nario," said S&P.