Jul 2023 Financial News

S&P Rating Update Trinidad and Tobago

Jul 27, 2023

Trinidad and Tobago - S&P Update July 26th

Our BBB-/Stable/A-3 rating reflects Trinidad and Tobago's favorable external profile and stable democracy. It also reflects still-solid government financial assets that mitigate the effect of economic cycles on fiscal and external performance. Although the positive effects of one such cycle led the country to have an exceptional year in 2022, marked by surging exports and a fiscal surplus, we do not expect exports and fiscal balances will be as strong in 2023. The government used the surplus to accelerate value added tax (VAT) refund payments and contribute to the Heritage and Stabilization Fund (HSF).

In 2023, we expect gas production will decline slightly from the previous year and oil production will rise slightly. Lower commodity prices will lead to falling export values year over year. We expect Trinidad and Tobago's economic growth to be 2.5% in 2023, and 1.7% in 2024.

We expect the government will return to fiscal deficits in the current fiscal year of about 2.3% of GDP. We do not expect net debt will rise materially, and it will remain below 30% of GDP, supported by assets held in the country's HSF. We expect the government will refinance an upcoming bond of $550 million that matures in early 2024.