Aug 2008 Financial News

T&T's credit rating moves up

Aug 19, 2008

This country's credit rating has improved on the international market, moving local companies up the ranks among the most stable borrowers in the world.

The country's overall long term credit rating moved from and A- to an A, international financial research and analysis publishing company, Standard's & Poor's (S&P), says.

According to financial website Forbes.com, S&P representatives said the improved rating came "on the back of a booming energy economy that has grown at an average of 9.3 per cent annually since 2003".

S&P said the country's future in terms of its credit debt looks stable, and the country's overall debt profile, which is improving, reduces the economy's vulnerability to external economic factors.

However, the New York-based financial research firm warned that the country's high non-energy deficit (which represents the country's heavy reliability on energy revenues due to low income generation in the non-energy sectors), shows the country is making itself vulnerable to the changing nature of prices in the volatile market.

The company's report echoes the sentiment that many local economists have been making for several years now. It stated that despite Trinidad and Tobago's stable economic outlook and strong economic balance sheet, the real challenge for the country lies in fuelling further economic diversification to reduce the vulnerability that the 15 per cent non-energy deficit continues to highlight.

In conclusion, the company said nevertheless, "the liability of persistent losses in public-sector enterprises like the Water and Sewerage Authority, which in 2007 had an operating loss which totalled one per cent of the country's GDP, continues to restrain international credit ratings".


Source:
Aretha Welch
Trinidad Daily Express
Tuesday, August 19th 2008

http://www.trinidadexpress.com/index.pl/article_business?id=161365619